Q: I realize you are not tax experts but I am confused from info obtained from bank and CRA web sites. I am 69 and wife is 59. I would like to split income from RRSP (not RRIF) with her when I withdraw some funds this year to pay for house repairs. Some sites indicate that RRSP withdrawals do not count as pension income. Does this mean that I can’t split it with her? CRA seems to say that RRSP (T4RSP) is eligible. Confusing!
Thoughts from you and members would be helpful.
Thoughts from you and members would be helpful.
5i Research Answer:
This is a topic that seems a bit nuanced so is best to be discussed with a tax professional. RRSP withdrawals though do not qualify for the pension income tax credit. That's why when an investor turns 65, it's often better to convert all or a portion of their RRSP or RRIF to get tax savings of $2,000 on retirement income. RRSP splitting is allowed, it just may not be the best approach, depending on one's own tax circumstances. This link will provide some colour.
https://www.cibc.com/content/dam/personal_banking/advice_centre/tax-savings/income-splitting-strategies-en.pdf