Question

G, age 68, received pension income from the following sources in the current year: Old-age security pension $7,100; Canada Pension Plan $9,000; and Pension income from former employer’s pension plan $34,000. What is the maximum elected split-pension amount that can be reported on the tax return of G’s spouse?

Answer 1

Eligibility for pension splitting:

• Age must be 65 Years or more

Payments eligible for pension splitting:

• Registered Retirement Savings Plan
• Registered Retirement Income Fund
• Deferred Profit Sharing Plan

Payments not eligible for pension splitting:

• Canada Pension Plan payments
• Quebec Pension Plan payments
• Earnings from a United States individual retirement account
• Old Age Security payments

Maximum Pension Splitting:

Pension splitting allows higher-income spouses to lower their payable tax by sharing up to 50 % of eligible pension income with a spouse.

Calculation of Maximum elected split-pension amount that can be reported on the tax return of G’s spouse:

1. G's Age is 68, there fore he is eligible for pension splitting
2. Old-age security pension $7,100 and Canada Pension Plan $9,000 are not eligible for pension splitting
3. Assumed that former employer's pension plan is one of the pension plan among the eligible pension plans

There fore Maximum elected split-pension amount that can be reported on the tax return of G's spouse is up to 50 % ($34,000) = $ 17,000