Pension Income Amount
What counts as eligible pension income and how to get the $2,000 pension amount.
The short version
- The pension income amount lets you claim a credit on up to $2,000 of eligible pension income: $280 off federal tax for 2026, plus a provincial credit.
- At any age, a lifetime pension from an employer's registered pension plan qualifies.
- At 65 and over, RRIF payments, annuities from an RRSP, and some other annuities qualify too.
- CPP, OAS and QPP never qualify. Neither do RRSP lump-sum withdrawals.
- Couples can split eligible pension income, which can let both spouses claim the full $2,000.
Pension Income Tax Credit Canada
The pension income amount is small, but it's the reason retirement planners say “convert $2,000 to a RRIF at 65.” It's also one of the reasons pension splitting is worth doing even when both spouses have similar incomes. Here's what counts and how to get it twice.
What Counts as Eligible Pension Income
| Type of income | Under 65 | 65 and over |
|---|---|---|
| Lifetime pension from an employer registered pension plan (T4A box 016) | Yes | Yes |
| RRIF payments, LIF payments | Only if received because of a spouse's death | Yes |
| Annuity payments from an RRSP or deferred profit sharing plan | Only if received because of a spouse's death | Yes |
| Interest portion of some non-registered annuities | No | Yes |
| CPP, QPP, Old Age Security | No | No |
| RRSP lump-sum withdrawals, death benefits, retiring allowances | No | No |
Pension income you received through a split from your spouse (line 11600) counts too, under the same rules. The slip details are on T4A slip explained.
What It's Worth
Federally, 14% of up to $2,000: a maximum of $280 for 2026. Provinces add their own credit, on maximum amounts that range from about $1,000 to $2,000. For a couple who can each claim the full amount, that's over $560 a year federally, every year of retirement.
The $2,000 RRIF Trick
If you're 65 or over and have no employer pension, you have no eligible pension income, so the credit is wasted. Moving enough of your RRSP into a RRIF to pay out $2,000 a year creates eligible income; see converting an RRSP to a RRIF. The $2,000 is taxable, but the credit offsets the federal tax on most of it at the lowest bracket. For many people it's a small, clean win; for those near the OAS clawback threshold ($95,323 for 2026), check the whole picture first. See RRSP tax deduction and marginal tax rate.
Are you getting the pension amount twice?
Tell the assistant both spouses' ages and pension, RRIF and other income. It checks who qualifies for the pension amount, and whether splitting or a small RRIF would add one.
Pension Splitting and the Credit
When a couple splits eligible pension income (form T1032), the receiving spouse can claim the pension income amount on what they receive, if it's eligible for them. That's often the easiest way to double the credit, and it can lower the couple's total tax beyond that. The rules are on pension income splitting.
Other Retirement Credits
- The age amount for people 65 and over: up to $9,208 for 2026, reduced once net income passes $46,432.
- The disability amount, and medical expenses, which often grow in retirement.
- Unused age and pension amounts can be transferred to a spouse; see spousal amount.
An overview of retirement taxes is on retirement tax in Canada.
Pension Income Amount Questions
What is the pension income amount?
A non-refundable credit on up to $2,000 of eligible pension income, worth up to $280 federally for 2026, plus a provincial credit.
Does CPP or OAS qualify for the pension income amount?
No. CPP, QPP and Old Age Security never qualify.
Can I claim the pension income amount before 65?
Yes, for a lifetime pension from an employer registered pension plan. RRIF and RRSP annuity income qualifies before 65 only if received because of a spouse's death.
Can I transfer the pension income amount to my spouse?
Yes, unused amounts can be transferred on Schedule 2. Pension splitting can also let both spouses claim it.
Sources: CRA, Line 31400 Pension income amount; 2026 indexation table. Checked October 2026. The RRIF strategy is a general planning note, not advice for your situation.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.