Consider a married couple, David (age 70) and Susan (age 63), living in Canada. David receives $20,000 annually in eligible pension income. Susan has no pension income. To what extent can David split his eligible pension income with Susan for tax purposes, assuming they both elect to do so?

Question: Consider a married couple, David (age 70) and Susan (age 63), living in Canada. David receives $20,000 annually in eligible pension income. Susan has no pension income. To what extent can David split his eligible pension income with Susan for tax purposes, assuming they both elect to do so?

Answer options:

• Up to 100% of David's eligible pension income can be split. ✅ A maximum of 50% of David's eligible pension income can be split.
• David cannot split pension income with Susan until she is also 65.
• Pension income splitting is only allowed for RRIF withdrawals, not pension payments.

Correct answer: A maximum of 50% of David's eligible pension income can be split.

Explanation: Pension income splitting allows eligible individuals to allocate up to 50% of their eligible pension income to a spouse or common-law partner to potentially reduce the couple's overall tax burden. This is available for eligible pension income when the recipient is 65 or older.