Who Is Eligible for Income Splitting in Canada?
Eligibility for income splitting depends on the income type and your relationship status. In general, married or common-law couples living together can elect to split eligible pension income; CPP pension sharing is available to eligible couples via Service Canada. The CRA provides authoritative eligibility criteria for pension income splitting.
Core eligibility requirements
- Relationship: You must be legally married or in a recognized common-law partnership as defined by CRA. Common-law status usually requires living together in a conjugal relationship for 12+ months (province rules differ for other benefits).
- Residency: Generally both spouses must be residents of Canada on December 31 of the tax year for pension income splitting rules to apply.
- Income type: Only eligible pension or RRIF income (and other qualifying pension sources) can be split via the CRA election; CPP has a separate sharing mechanism.
Special eligibility notes
Couples separated by illness, education, or business reasons may still be eligible to split pension income — the CRA provides for these circumstances as long as the separation is not due to a breakdown of the relationship.
At what ages does eligibility change?
Some income sources have age-related rules. For example, RRIF income is commonly treated as eligible pension income for splitting when you are 65 or older (check CRA definitions for the tax year). CPP sharing has its own rules about being eligible to receive or having applied for CPP.
Common scenarios
New retirees: If one spouse retires earlier with a pension and the other continues to work, pension income splitting can still be used for eligible pension receipts once they begin. Model the first few years carefully to avoid unexpected OAS clawbacks. See our article on OAS Clawback.
Couples with small incomplete pensions: Even small pensions can be split — sometimes small shifts reduce a spouse’s income enough to preserve age credits or GIS eligibility.
How to confirm your eligibility
Check CRA’s pension income splitting page and the eligible pension income list. If planning to share CPP, apply via Service Canada. If unsure, run scenarios in the Retirementize calculator and consult a tax pro to confirm the interplay of credits, provincial rules, and benefit clawbacks.
Bottom line
If you and your partner are married or in a recognized common-law partnership and receive eligible pension or CPP income, chances are you can use a statutory mechanism to reallocate income for tax efficiency. Retirementize makes it simple to quantify the benefit before you file.