How do we make the election?

Both spouses complete and sign Form T1032, Joint Election to Split Pension Income, and each files it with their return, every year you want to split. The percentage, up to 50%, can change each year, and the election can be amended within three years.

Does the receiving spouse get the pension income amount?

Yes, on up to $2,000 of the transferred income, worth $280 federally at the 14% credit rate for 2026, if it qualifies for them. A receiver who is 65 or older qualifies on any transferred amount. Under 65, only the part from life-annuity payments under a registered pension plan counts (line 28 of Form T1032, and the CRA's line 31400 eligibility chart).

Should we always split 50%?

No. Splitting lowers the transferor's tax and OAS recovery tax but raises the receiver's, and can push the receiver over the OAS threshold or shrink their age amount. In our second example a couple is best off at a 17% split, anything from 15% to 29% is within $25 of it, and 50% costs more than no split at all. Test the range, not just the maximum.

How does the OAS clawback fit in?

The OAS recovery tax takes 15% of net income above $95,323 for 2026 income. Splitting lowers the transferor's net income, so it can reduce or remove their clawback. The transferred amount is added to the receiver's net income and counts against their threshold.

What is CPP pension sharing, and is it the same thing?

No. CPP sharing is a separate application to Service Canada. It splits the CPP retirement pension earned during the relationship and moves the actual payments, with the total unchanged. Pension income splitting is a tax election that moves income on paper between returns.

Does Quebec follow the same rules?

Quebec's rules differ. Revenu Québec's line 123 allows the transfer for Quebec tax only when the transferring spouse was 65 or older at the end of the year. We could not open the Revenu Québec page at verification, so confirm the current rule there before filing.

Pension Income Splitting in Canada (2026)

This guide is part of Tax-saving strategies for Canadians (2026).

Who this is for

Retired couples where one spouse gets most of the pension, RRIF or annuity income and the other has little. The bigger the income gap, and the closer the higher earner is to the OAS recovery threshold, the more there is to gain.

How it works

Under ITA section 60.03, spouses or common-law partners can elect each year on Form T1032 to move up to 50% of one spouse’s eligible pension income to the other’s return.

What qualifies. At any age: life-annuity payments from a registered pension plan. From the year the transferring spouse turns 65: RRIF and LIF withdrawals and RRSP annuity payments. Never: CPP, OAS, or lump-sum RRSP withdrawals.

What moves with it. Tax withheld on the pension is split between the two returns in the same proportion. The receiving spouse can claim the $2,000 pension income amount on the transferred income ($280 federally at the 2026 credit rate of 14%) if they are 65 or older. Under 65, only the part from a registered pension plan life annuity counts (line 28 of Form T1032).

The OAS link. The OAS recovery tax claws back 15% of net income above $95,323 (2026 income, applied July 2027 to June 2028). Moving pension income off the transferor’s return can pull them under that line. But the same income lands on the receiver’s return, where it counts against their threshold and their age amount ($9,208 for 2026, reduced once net income passes $46,432).

CPP pension sharing is different. It is an application to Service Canada that divides the CPP earned during the relationship between the two spouses.

Worked examples (Ontario, 2026)

Both examples come from the same optimiser as the pension income splitting calculator: 2026 federal and Ontario tax, the age amount, the pension income amount, the transfer of one spouse’s unused age and pension amounts to the other (Schedule 2), and the OAS recovery tax, all from our data files. Each spouse receives the maximum OAS of $9,150 a year.

Example 1: one pension, one small CPP. Spouse A (68) has an $80,000 pension and $16,000 of CPP. Spouse B (66) has $8,000 of CPP.

	No split	50% split
A’s net income	$105,150	$65,150
B’s net income	$17,150	$57,150
Income tax, A + B	$22,202	$16,904
A’s OAS recovery tax	$1,474	$0
B’s unused age amount, used by A	−$1,191	$0
Family total	$22,485	$16,904
Saving		$5,580

Here the full 50% is best. A drops below the OAS threshold and gets most of the age amount back, and B, now with pension income, is still in a low bracket. With no split, B has no tax to use their age amount against, so it transfers to A. After the split, both use their own.

Example 2: two pensions. Spouse A has a $100,000 pension and $16,000 of CPP. Spouse B has a $60,000 pension and $12,000 of CPP.

Split	A’s net income	B’s net income	B’s OAS recovery tax	Family tax + OAS recovery
0%	$125,150	$81,150	$0	$47,856
10%	$115,150	$91,150	$0	$46,127
17% (best)	$108,150	$98,150	$424	$45,610
20%	$105,150	$101,150	$874	$45,610
30%	$95,150	$111,150	$2,374	$45,645
40%	$85,150	$121,150	$3,874	$47,050
50%	$75,150	$131,150	$5,374	$49,065

The best split is 17%, saving $2,246 against no split. The curve is flat, so anything from 15% to 29% is within $25 of it. At 50% the couple pays $1,209 more than with no split at all, and $3,455 more than the best, because B is pushed $35,827 over the OAS threshold and into a higher bracket.

The rules that trip people up

Age 65 for RRIF income. Before that, only registered pension plan annuities qualify.
CPP and OAS never split on T1032. For CPP, use pension sharing through Service Canada.
The receiver’s side counts. Watch the receiver’s OAS threshold, age amount, provincial credits and any Guaranteed Income Supplement.
Death or separation in the year changes eligibility. The CRA’s pension income splitting page sets out the rules.

What to do next

Run the pension income splitting calculator, which scores every split from 0% to 50%, on your own figures first, then check each spouse’s clawback with the OAS clawback calculator, see what your RRIF must pay out with the RRIF minimum calculator, and use the CPP and OAS planner for the start-age decision underneath. More strategies: Tax-saving strategies for Canadians (2026).

Questions people ask

What income can be split?: Eligible pension income. At any age: life-annuity payments from a registered pension plan. From the year the transferring spouse turns 65: RRIF and LIF withdrawals, RRSP annuity payments and similar amounts. Never: CPP or QPP, OAS, and lump-sum RRSP withdrawals.
How do we make the election?: Both spouses complete and sign Form T1032, Joint Election to Split Pension Income, and each files it with their return, every year you want to split. The percentage, up to 50%, can change each year, and the election can be amended within three years.
Does the receiving spouse get the pension income amount?: Yes, on up to $2,000 of the transferred income, worth $280 federally at the 14% credit rate for 2026, if it qualifies for them. A receiver who is 65 or older qualifies on any transferred amount. Under 65, only the part from life-annuity payments under a registered pension plan counts (line 28 of Form T1032, and the CRA's line 31400 eligibility chart).
Should we always split 50%?: No. Splitting lowers the transferor's tax and OAS recovery tax but raises the receiver's, and can push the receiver over the OAS threshold or shrink their age amount. In our second example a couple is best off at a 17% split, anything from 15% to 29% is within $25 of it, and 50% costs more than no split at all. Test the range, not just the maximum.
How does the OAS clawback fit in?: The OAS recovery tax takes 15% of net income above $95,323 for 2026 income. Splitting lowers the transferor's net income, so it can reduce or remove their clawback. The transferred amount is added to the receiver's net income and counts against their threshold.
What is CPP pension sharing, and is it the same thing?: No. CPP sharing is a separate application to Service Canada. It splits the CPP retirement pension earned during the relationship and moves the actual payments, with the total unchanged. Pension income splitting is a tax election that moves income on paper between returns.
Does Quebec follow the same rules?: Quebec's rules differ. Revenu Québec's line 123 allows the transfer for Quebec tax only when the transferring spouse was 65 or older at the end of the year. We could not open the Revenu Québec page at verification, so confirm the current rule there before filing.

Sources

Every figure in this guide comes from one of these primary sources, checked on September 11, 2026.