Pension Income Splitting in Canada: Who Qualifies and How Form T1032 Works
The income this election moves sits inside how much you need to retire and the seven-step plan. The retirement calculator does not split income between two returns. It uses one tax rate you type. If you will elect on T1032, the calculator’s single rate is the wrong picture of the household tax unless you have already chosen a rate that reflects the split.
- The cap is 50% of eligible pension income. The percentage can change every year. A 2024 election does not lock the 2025 percentage. CRA’s page, details dated 2026-01-20, says this explicitly.
- Under 65, eligible pension income is generally a life annuity from a pension plan, not a RRIF or RRSP annuity. At 65, or if the amount is received because a spouse died, RRIF payments and RRSP annuity payments are included.
- CPP, QPP, OAS, a tax-free treaty pension, and US IRA income are not eligible. Neither is a RRIF amount you transferred on to another registered plan.
- The pension income amount is up to $2,000 for each spouse, on what remains eligible after the split, and the receiver’s eligibility can still depend on age.
- Tax withheld moves in the same proportion as the income. CRA will not reduce withholding during the year just because you plan to elect.
Who can elect, and whose age matters?
The transferring spouse is the person who received the eligible pension income and elects to allocate part of it. The receiving spouse is the person who is allocated that part. CRA says you can split with your spouse or common-law partner regardless of their age, if the other conditions are met. The age that decides whether the income is eligible in the first place is the transferring spouse’s age, or whether the income was received because a spouse died. A 64-year-old cannot make a RRIF withdrawal eligible by allocating it to a 70-year-old partner. The receiver’s age still matters for the $2,000 pension income amount on their own return. CRA says the pension that qualifies for the pension income amount for the transferor does not necessarily qualify for the receiver, because eligibility can depend on age. Note 1 of Step 4 on Form T1032 is the instruction. This page does not paraphrase that note into a yes.
Living apart at year-end for medical, educational, or business reasons does not, on CRA’s page, block the election. A breakdown that covers 90 days including December 31 does. You both still have to be residents of Canada on December 31, or on the date of death.
What income can move, and what cannot?
CRA’s eligible list, for the transferring spouse, starts with the taxable part of life annuity payments from a superannuation or pension plan. Those can be split without waiting for 65. If the transferor is 65 or older at the end of the year, or the amounts are received because a spouse or common-law partner died, the list adds annuity and RRIF payments, including life income fund payments, RRSP annuity payments, and certain qualifying amounts from a retirement compensation arrangement. Variable pension benefits from a money-purchase provision, and payments from a pooled registered pension plan, are not life annuity payments. They do not qualify unless the transferor is 65 or older at year-end, or they are received because a spouse died.
| Amount | Under 65 | 65 or older at year-end, or received on a spouse’s death |
|---|---|---|
| Life annuity from a registered pension plan | Generally eligible | Eligible |
| RRIF or life income fund payments, RRSP annuity | Not eligible, unless received because a spouse died | Eligible |
| CPP, QPP, OAS | Not eligible | Not eligible |
| US IRA, or a foreign pension that is tax-free in Canada under a treaty | Not eligible | Not eligible |
Table as of October 2026. It is a reading of CRA’s eligible and non-eligible lists, not a second form. The detailed slip-by-slip charts are the line 31400 pages for under 65 and for 65 and older. A foreign pension that is taxable in Canada can still be eligible. CRA says the part that is not deductible on line 25600 can qualify for the pension income amount, and the splitting page points at those charts. Income from a United States IRA does not.
Half of $40,000 is $20,000. That is the most Form T1032 can move. The transferor reports $20,000 of that RRIF income. The receiver reports $20,000 as elected split-pension income. This article does not turn those two lines into tax saved. The brackets are the federal brackets plus your province, and the OAS recovery tax reads one person’s net income. CRA says splitting can change the age amount, the spouse or common-law partner amount, and the repayment of OAS. It does not change a credit that uses both incomes together, and CRA names the GST/HST credit as that kind of credit. A $20,000 shift that looks large on one return can be small once those tests are run. The recovery-tax article is OAS, GIS, and the clawback.
How do you file Form T1032?
Both spouses complete, sign, and attach the same Form T1032 to both paper returns, by the filing due date. The information on the two forms has to match. If you file electronically, the software still needs the joint election. CRA may allow a late or amended election, or a revocation, if you apply on or before the day that is three calendar years after the filing-due date for that year. An amendment needs a new completed and jointly signed T1032. A revocation needs a letter signed by both of you. You do not send a different percentage in your head and hope the first form is ignored.
Withholding follows the income. If you allocate 50% of the eligible pension, you allocate 50% of the tax withheld on that pension. CRA’s own example is that proportion. If one slip mixes eligible and non-eligible amounts, the page gives the fraction: eligible pension divided by total pension on the slip, times the tax withheld. CRA also says it cannot approve a reduction of tax withheld at source based on an election to split. You settle the difference on the return. You do not get a new TD1 out of T1032.
How does the $2,000 pension income amount work after the split?
Each spouse claims the pension income amount on line 31400 using Step 4 of the form. The transferor claims the lesser of $2,000 and the eligible pension income left after the allocation. The receiver claims the lesser of $2,000 and the pension income that is eligible for the amount on their return, including the allocated income that qualifies for them. Two $2,000 claims are possible. They are not automatic. A receiver under 65 may be allocated income that still does not qualify for their own pension credit. The line 31400 page reviewed alongside this one is labeled tax year 2025. The splitting page, dated 2026-01-20, still states the $2,000 figure. If a later indexation changes the dollar, the form for that year wins.
Service Canada’s CPP amount page says you can share your CPP retirement pension with a spouse or common-law partner, and that sharing can lower tax by decreasing taxable income. That is not Form T1032, and CPP is on CRA’s list of income that is not eligible for pension income splitting. Do not put CPP on T1032 because a blog treated “pension” as one word. The estimate of the pension itself is how much CPP you will get. A spousal RRSP, which moves income before 65 by whose name is on the account, is the spousal RRSP guide. The wider couple strategies are income splitting for couples.
Frequently asked questions
Can both spouses split to each other in the same year?
No. CRA says only one joint election can be made for a tax year. If both of you have eligible pension income, you decide who transfers and who receives. You do not file two T1032 elections in opposite directions.
Does my spouse have to be 65?
No. CRA says you can split eligible pension income regardless of the receiving spouse’s age, if the other conditions are met. The transferor still has to have income that qualifies, which for RRIF and RRSP annuity income generally means the transferor is 65 or the payment is because a spouse died. The receiver’s age can still block their own $2,000 pension credit.
Can I split OAS or CPP?
Not on T1032. Both are on the non-eligible list. CPP sharing, if you want it, is a Service Canada election with its own rules. This page does not restate the sharing fraction. OAS is not split and is not shared. It can be affected, because CRA says OAS repayment uses one taxpayer’s net income, and allocating pension income changes those two net incomes.
Will the election change my GST/HST credit?
CRA says benefits calculated on the combined net income of both spouses, and it names the GST/HST credit, do not change because of the split. Credits and benefits that use one person’s net income can change. The age amount and the OAS recovery tax are the ones CRA names. Run those before you treat 50% as the obvious percentage.
Can I use a different percentage next year?
Yes. CRA says that if you elected in 2024 you do not have to use the same percentage in 2025. The election is annual. A year you do not want to split, you do not elect. A year the income mix changes, you pick a new percentage up to 50%.
Does a RRIF minimum have to be split?
No. The minimum forces the withdrawal. The election is optional and capped at half of what is eligible. You can allocate nothing, or any percentage up to 50. The factor that set the minimum is the RRIF table. Splitting does not reduce the minimum the carrier has to pay.
Sources
- CRA: pension income splitting, page details 2026-01-20
- CRA: line 31400 pension income amount, tax year 2025 page
- Canada.ca: CPP payment amounts, including pension sharing
The form moves income. The return prices it.
Two net incomes, the pension credit, and the OAS recovery tax are filing questions. The 2026 tax guide is that half of the election.
Get the 2026 Tax Guide — $49 CAD
