Pension Income Splitting
How retired couples split pension income on form T1032, and how to pick the best split.
The short version
- A couple can move up to 50% of one spouse's eligible pension income to the other for tax purposes. No money changes hands; it's done on form T1032, signed by both, filed with both returns.
- Employer registered pension plan income qualifies at any age. RRIF, LIF and RRSP annuity income qualifies once the pensioner is 65 (or earlier if received because of a spouse's death).
- CPP and OAS can't be split this way. CPP can be “shared” through a separate application to Service Canada.
- The tax withheld moves in the same proportion as the income.
- Choose the split each year. The best split balances income, keeps both of you out of the OAS clawback, and gives both of you the pension income amount.
Pension Income Splitting Canada
Canada taxes people one at a time, at rising rates. So a couple with $90,000 of pension on one side and $15,000 on the other pays noticeably more than a couple with $52,500 each. Pension splitting lets retirees even it out on paper. For some couples it's worth several thousand dollars a year, and it costs one form.
Who Can Split
- You were married or common-law at the end of the year, and both of you were Canadian residents on December 31.
- You weren't living apart for 90 days or more ending December 31 because of a breakdown in the relationship (living apart for medical, work or school reasons is fine).
- The transferring spouse received eligible pension income.
What Can Be Split
| Income | Pensioner under 65 | Pensioner 65+ |
|---|---|---|
| Lifetime pension from an employer's registered pension plan | Yes | Yes |
| RRIF and LIF payments | Only if due to a spouse's death | Yes |
| RRSP annuity payments | Only if due to a spouse's death | Yes |
| CPP, QPP, OAS | No | No |
| Tax-exempt foreign pensions, US IRAs | No | No |
Note the age test is the age of the spouse who receives the pension, not the one it's moved to.
How Much It Can Save
Example, Ontario, 2026: one spouse has $90,000 of employer pension and the other has $15,000 of CPP and OAS. Moving $37,500 to the lower-income spouse brings both to $52,500 of income. With basic credits only, our calculator puts the couple's income tax at about $18,460 before the split and about $15,280 after: roughly $3,200 a year saved. The higher earner's marginal rate drops from about 29.7% to about 19%. Age and pension credits change the exact figure, usually in the couple's favour. Find your own best split with the pension splitting calculator, which tries every amount for both of you, and see marginal tax rate for why it works.
What is the best split for your household?
Give the assistant both spouses' ages, province and every income source. It tries different splits and shows the one with the lowest combined tax, including the OAS clawback and age amount.
Choosing the Split: Watch These
- The OAS clawback. Over $95,323 of net income for 2026, OAS is reduced by 15% of the excess. Split to keep both of you under it; see OAS clawback.
- The age amount. It shrinks once net income passes $46,432, so piling income on one spouse can cost their age amount. Unused age amounts can be transferred, too; see spousal amount.
- The pension income amount. Splitting eligible income can give the receiving spouse the $2,000 credit too; see pension income amount.
- Instalments. Moving income without moving tax can leave one spouse with a balance and instalment notices. Tax withheld moves in the same proportion, but other income doesn't.
How to Do It
- Both spouses complete and sign form T1032 with the same elected amount.
- The pensioner deducts the split amount on line 21000. The receiving spouse reports it on line 11600.
- The tax withheld on the split share is moved on the forms too.
- File it with both returns by the filing deadline. Forgot in a past year? A late or amended election can sometimes be accepted; see how to change a tax return.
Most tax software does the optimizing for you if you prepare both returns together. That's also when Return Check is most useful: it compares both returns and flags splits that don't match.
CPP Sharing Is Different
CPP can't go on T1032. Instead, spouses who are both at least 60 can apply to Service Canada to share their CPP retirement pensions, which actually changes who receives the payments. It can help when one spouse has a much larger CPP. More on retirement income in retirement tax in Canada.
Other ways couples share credits and deductions are on marriage and taxes.
Pension Splitting Questions
How much pension income can I split with my spouse?
Up to 50% of your eligible pension income, using form T1032 signed by both spouses and filed with both returns.
Can I split CPP and OAS?
No. CPP and OAS cannot be split on form T1032. CPP retirement pensions can be shared through a separate application to Service Canada.
Can I split pension income before age 65?
Yes, for a lifetime pension from an employer registered pension plan. RRIF and RRSP annuity income can only be split from 65, unless received because of a spouse's death.
Does the tax withheld move with the split pension?
Yes, tax withheld on the pension is allocated in the same proportion as the income.
Do I have to split the same amount every year?
No. You choose the amount each year when you file.
Sources: CRA, Pension income splitting; form T1032; 2026 indexation table. The savings example is a rough estimate by us. CPP sharing rules are from Service Canada. Checked October 2026.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.