When pension income
is split with a spouse, will the spouse get a pension income tax credit?
Starting with the 2007 tax year, up to 50% of pension
income that is eligible for the pension income tax credit may be
transferred to a spouse. See our article on pension
splitting. The splitting of pension income
may allow the spouse to claim a pension income tax credit. An officer of the Department of Finance advised
that:
where pension income which does not fit the description of
qualified pension income
has been transferred to a spouse, the spouse will not be eligible for the
pension income tax credit unless they are 65 or older, and
where pension income which fits the description of qualified pension
income has
been transferred to a spouse, the spouse will be eligible at any age for
the pension income tax credit based on the transferred amount.
The intent is that if the pension income would have been eligible for the
pension income tax credit if received directly by the spouse, it will also be
eligible when received as a transfer of pension income.
If a taxpayer is under 65 and receiving pension income eligible for the
pension tax credit (qualified pension income), the spouse will also be
eligible for the pension tax credit,
regardless of age.
If a taxpayer is 65 or older and receiving pension income that would
not
be eligible for the pension credit if received by a person under 65,
the spouse will not be eligible for the pension credit
based on the transferred pension income.
If a taxpayer is 65 or older and receiving pension income that would
be eligible for the pension credit if received by a person under 65,
the spouse will be eligible for the pension credit, regardless of age.
When this situation applies, see Completing Step 4 of the
T1032.
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substitute for professional advice. Each person's situation differs, and
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site to your best advantage.
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