If you’re 65 or older and receiving eligible pension income, you may be missing out on a significant opportunity to reduce your taxes through pension income splitting in Canada. In this video, I explain how this strategy works, what types of pension income qualify, and where the rules can get tricky. For many of my clients—particularly those with uneven household incomes—splitting pension income is a reliable way to legally reduce the overall family tax bill.
Video Transcript: Pension income splitting in Canada
Having the ability to split your pension income with your spouse can be a very tax-effective technique you should be looking into, if not doing already.
There are a host of rules that are applicable and can restrict what you’re able to do, but in general, if you’re over sixty-five years of age, you have that ability to split annuity income.
Not all pensions qualify. Certain ones do. Notable exceptions of ones that do not: CPP and old age security, for example.
But take a look—if you can halve your income from the pensions by providing it to your spouse, using another set of tax brackets that may be taxed at lower rates can put a few extra dollars in your pocket. This year and in years following.
I’m George Dube, saving the world from tax, one bow tie at a time®.
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Resources
For additional resources related to how to maximize tax deductions, see:
- 2025 tax season tips: How to save more this year
- Claiming automobile expenses personally vs corporately
- Claiming medical expenses in Canada
- Deducting interest expenses: The most missed tax deduction
More questions?
Still have questions? I want to help you Do wonderful things®, so please contact me today.
Remember – circumstances are unique! This information is summary in nature. Seek out advice from your tax advisor about your specific situation.
