Great Resource for Seniors Products & Services Pension Splitting This is the biggest change in the year and it will impact many, many taxpayers-all in a very positive way! Up to 50% of certain pension income can be split, shifted or allocated from a higher tax-bracket to a lower tax-bracket spouse.  This results in a couple paying less tax!  This will be accomplished by making a few notations on each spouse's tax return.  There is no need for the pension payments to be changed-they can still be sent to one spouse- and no need to worry about whose name is on the T4A slip reporting to the pension income.  In addition to the couple saving tax, a senior may be entitled to the $2000 pension income credit that he or she previously was not. A portion of tax withheld on the pension can also be split-or shifted-to the lower tax-bracket spouse's tax return.  This will prevent cash flow burden where the lower tax-bracket spouse could have a significant tax liability due on April 30 while the higher-tax bracket spouse has a tax refund coming. What type of pension income qualifies for pension splitting? "Ineligible" pension income for pension splitting * OAS- Old Age Security * CPP- Canada Pension Plan-but other rules exist to split or share this type of income * Non-annuity registered retirement savings plan withdrawals "Eligible" pension income for pension splitting When the actual pension recipient is 65 or over at the end of a year the pension income eligible for "splitting" includes: *Annuity payments from an RPP plus * Amounts noted above under eligible" if received by virtue of the death of  spouse Article compliments of Advisor - Dynamic Advisor,  Edition 2008, Brian J. Quinlan, CA, CFP, TEP-Campbell Lawless Professional Corp. CA Toronto