Beginning with the 2007 tax year, Canadian residents were given the option of allocating up to one-half of their eligible pension income with their resident spouse, for income tax purposes.
The income being allocated must qualify for the pension income amount and may include the taxable part of annuity payments from a superannuation or pension.
The amount allocated is deducted in determining the net income of the person who actually received the pension income, and it is included in computing the net income of the spouse. Pension splitting affects the calculation of income and tax payable for both persons, so they must agree to the amounts allocated on their tax returns.
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