Became effective in the beginning of 2007, and couples will be able to earn up to $4000 a year in qualifying pension income without attracting federal tax.
A person receiving an “eligible” pension will be allowed to split up to 50% of this income with a spouse or common-law partner. When pension income has been allocated both partners must make a joint election on form T1032 – Joint Election to Split Pension Income.
Eligible pension income would include:
Annuity receipts under an RRSP amounts received from a RIFF, and other non-government annuities provided the recipient is at least 65 by end of the year, or the amount received is from a spouse or common law partner’s death. ·Annuity received from a pension fund regardless of recipient's age.
If you are 65 years of age it may beneficial to consider creating pension income by converting part of your RRSP to a life annuity or a RRIF if your financial circumstances allow you.