You might be able to claim up to $2,000 of your federal pension income amount if you reported eligible pension, superannuation, or annuity payments on your return. With this non-refundable tax credit, you can reduce the amount of taxes you owe.

Keep in mind, not all types of pension income qualify for the pension income amount. For example, benefits such as Old Age Security (OAS) or Canada Pension Plan (CPP) aren’t eligible for this tax credit. Additionally, a part of what qualifies is based on your age:

• If you’re 65 years of age or older, pension income that’s eligible for this tax credit include:
  • Income from a deferred pension savings plan (DPSP)
  • Regular annuities and income averaging annuity contracts (IAAC)
  • Registered Pension Plan (RPP) lifetime retirement benefits
  • Income from a Registered Retirement Income Fund (RRIF)
  • Income from a Registered Retirement Savings Plan (RRSP)
  • Elected split pension income
  • Employee Benefit Plan (EBP) benefits
  • Variable pension benefits
  • Certain foreign pensions (incl. US Social Security) unless it’s tax-free in Canada

• If you’re under the age of 65, the only income that qualifies for this amount are your RPP lifetime retirement benefits, elected split pension income, foreign pensions that aren’t tax-free, and pension plan and annuities you received as a result of the death of your spouse or common-law partner.

Note: If you’re eligible to claim the federal pension income amount, you can also claim the corresponding provincial amount. This amount varies based on the province or territory you live in:

• Alberta
• British Columbia
• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Northwest Territories
• Nova Scotia
• Nunavut
• Ontario
• Prince Edward Island
• Québec
• Saskatchewan
• Yukon

Can I transfer my pension income amount?

Yes, you can transfer all or part of your pension income amount that you don’t need to reduce your own tax payable to zero to your spouse or common-law partner.

Where can I claim this?

H&R Block’s tax software will automatically claim both your federal and provincial pension income amount on your return for you.

If you and your spouse are preparing your returns together (coupled return) and you don’t need the full amount to reduce your tax payable, H&R Block will automatically transfer and apply any unused portion of the amount to your spouse’s return.

If, however, you’re not preparing your returns together, your spouse will need to enter amounts (specifically the pension income amount on line 5836) from your return on the Amounts from {Spouse}’s 2016 return page under the OTHER tab. H&R Block’s tax software will then apply the unused portion of the amount to your spouse’s return.