Pension Credit on Split Pension Income

[bjlorch]

I converted a LIRA to a LIF and will receive income from the LIF in 2018.  Some of that income will be transferred to my spouse who is not yet 65 year of age.I am 66 years old.  Will she be able to claim the Pension Credit on this transferred income? Does Turbo Tax automatically make the Pension Credit claim on her return.

[TurboTaxJennifer]

Just to clarify, when you wrote "Some of that income will be transferred to my spouse", are you referring to transferred "on paper" for pension splitting? Or will your spouse receive direct income from the LIF?

[bjlorch]

On paper for pension splitting.

[bjlorch]

FYI - I ran a test using Turbo Tax 2017 software. Entered T4RIF of $30,000 on my return.  On my return, on the pension worksheet page, I split this income by transferring $6,000 to my spouse. The transfer shows up on her return then (Line 116)  but the $2000 pension credit does not show on Schedule 1 Line 314 of her return. Wondering if I am reporting the LIF income on the wrong spot on my return.  Again, this is just a mock run trying to forecast what our 2018 tax situation will be.

[TurboTaxJennifer · Accepted solution]

Great to see you are planning ahead!

You're correct in your test run. While the income is eligible for pension splitting, because your spouse isn't yet 65, no pension income amount will be assigned to her. Here's the CRA chart for eligible pension income for taxpayers under 65: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-re...

I've also attached a screenshot of the form itself when entering a similar test run.