Thank you for this clear presentation of Income Sharing. One would guess that the government could not just make it straight forward and simple, and instead prorate CPP income sharing to years spent as a couple, only if both happen to be over the age of 60, and only on Pluto, when Charon is in retrograde, on a Tuesday after midnight.
It is a weird rule, for sure, in light of the fact that the same limitation isn't placed on RRIF income splitting as you raised in your other question.
In my case I'm 68 and my wife is a couple years shy of 65. When I do my taxes with and without splitting, there is a $375 difference on near $30,000 RRIF and LIF. And she has no income. There is no need to deposit the income in her own account, but CRA does issue her a cheque for the split refund. Very good explanations in your video.
Thanks! In the case of splitting RRIF income, no, only the transferor (account holder) needs to be 65. For something like a workplace DB pension (lifetime payments), there is no age restriction either on the transferor (pensioner) or transferee (spouse).
You did not really cover splitting RIFF funds. How long before do the RRSP funds need to be inside the RIFF in order to cash them and split the amount? Is there a special form to be filled out for RIFF splits, or is it simply done (like one's pension) at the time of filling out the year's tax forms with one's tax person? What are the specifics and limitations, such as age, how long the couple has been together, whether both of the people's great grandparents had red hair, is it a Tuesday past midnight when Charon is in retrograde around Pluto?
Thanks for watching the video. 1) No time limit, as long as the withdrawal comes from a RRIF account, then it is eligible to be split with your spouse provided the other conditions are met. 2) Done on the tax return 3) The big specifics are whether the RRIF account holder is over age 65 and that they can only split it with their spouse or common law partner. The spouse common law partner does not need to be 65, just the account holder, for the income to be split. For the spouse to take advantage of the pension tax credit though, they must be over 65. Hair colour of grandparents, and moon phases are beyond the scope of these rules and my understanding of them :)
Thanks Mark! Great coverage of the various components..including the fact the RRSP withdrawal are not eligible even if one thinks that it is "pension income". Would be good to mention that the spouse (recipient) does not need to be over 65 years of age..only the contributor needs to be over 65. Another important point to mention in examples which provide income and taxes/savings figures, one should be wary of the various provincial brackets for Canada to determine the correct estimated savings
Happy New Year Mark. Love your videos. I have some questions - I turned 65 in Dec 2023. Can I income-split for tax year 2023? Do I need to wait till 2024? I also received bridge benefits in 2023. Can I income-split that too? As well, can I claim the pension income tax credit for 2023? Would appreciate your thoughts. Many thanks. Mark.
Great questions. You can split your registered pension benefits with a spouse or common-law partner regardless of your age. I believe the bridge would likely qualify here. Since you were 65 years old at the end of the tax year, you can split your RRIF income with your spouse, even if they are not yet 65. You can claim the pension income tax credit as well since you were 65 at the end of the tax year. The portion of the bridge that you split with your spouse should avail them to the pension income tax credit as well. I think I should do a retirement income splitting Q&A video because I've been getting a lot of these lately :). Thanks for watching!
I would like to ask you about income splitting. My husband and i are both collecting pension but I'm still working. I know we can split a RRIF and a LIV but because I still have a regular income plus CPP and OAS can I also split my regular income? My husband has a lower income but would like to split his RRIF with me. I guess after listening to the video one more time regular income is not eligible. Thank you in advance.
Hey Mark, I have another question that no seems to be able to clearly answer….. Last year I converted one of my RRSP to a RIFF and I am withdrawing the minimum amount. I recently discovered that I no longer need the minimum amount. Is there a way to convert part of my RIFF back to an RRSP so I can reduce my minimum withdrawal amount ? (I am 64). Any feedback is appreciated.
Yes, you can directly transfer funds from your RRIF back to your RRSP on a tax-sheltered basis as long as you are not past your age 71 year. This does not require additional RRSP contribution room. If you want to re-contribute the minimum that you have to collect in 2024 (3.85% of your RRIF balance on December 31, 2023), you DO need RRSP contribution room for that small portion. Hope that helps.
@@WalhoutFinancial That is wonderful news!, thank you Mark. Can you clarify what you mean by "a tax-sheltered basis" ? Does this require that a specific form needs to be completed or a process that needs to be followed ? (Also thanks for the tip on re-contribution of the minimum, but will probably not need to do this at this time). Cheers Rick
@@rickstanhope7154 tax-sheltered, meaning you won't realize income for the amount transferred directly between your RRIF and RRSP in the year of the transfer. I haven't done this myself, but I think the forms will be a fairly straightforward internal transfer form at your financial institution. Definitely work closely with your advisor to make sure this is done with care.
Great video Mark. Is Retirement RIFF Income splitting done at the end of the year by filling out government forms when completing your income tax, or do you have to actually deposit money into your spouses account ?
Hey Mark, me again... Based on my research, OAS payments do not count against your GIS eligibility, and GIS eligibility is primarily based on your on your previous years Net Income. However I noticed that when completing my income tax, that OAS is bundled into my Net Income. If the above is true, how do I split out OAS from my Net Income ?
Hi Rick. You are right. OAS is not included in the GIS calculation. The CRA will do this calculation when calculating your eligibility for GIS. You don’t need to amend your return for this purpose. If you have more detailed questions feel free to set up a time with me.
You did a good job on this information video. Thank you.
Glad it was helpful!
Thank you for this clear presentation of Income Sharing. One would guess that the government could not just make it straight forward and simple, and instead prorate CPP income sharing to years spent as a couple, only if both happen to be over the age of 60, and only on Pluto, when Charon is in retrograde, on a Tuesday after midnight.
It is a weird rule, for sure, in light of the fact that the same limitation isn't placed on RRIF income splitting as you raised in your other question.
In my case I'm 68 and my wife is a couple years shy of 65. When I do my taxes with and without splitting, there is a $375 difference on near $30,000 RRIF and LIF. And she has no income. There is no need to deposit the income in her own account, but CRA does issue her a cheque for the split refund.
Very good explanations in your video.
Thanks!
Another excellent video Mark. One thing about income splitting that hasn't been clear to me is do both parties have to be over 65?
Thanks! In the case of splitting RRIF income, no, only the transferor (account holder) needs to be 65. For something like a workplace DB pension (lifetime payments), there is no age restriction either on the transferor (pensioner) or transferee (spouse).
You did not really cover splitting RIFF funds. How long before do the RRSP funds need to be inside the RIFF in order to cash them and split the amount? Is there a special form to be filled out for RIFF splits, or is it simply done (like one's pension) at the time of filling out the year's tax forms with one's tax person? What are the specifics and limitations, such as age, how long the couple has been together, whether both of the people's great grandparents had red hair, is it a Tuesday past midnight when Charon is in retrograde around Pluto?
Thanks for watching the video. 1) No time limit, as long as the withdrawal comes from a RRIF account, then it is eligible to be split with your spouse provided the other conditions are met. 2) Done on the tax return 3) The big specifics are whether the RRIF account holder is over age 65 and that they can only split it with their spouse or common law partner. The spouse common law partner does not need to be 65, just the account holder, for the income to be split. For the spouse to take advantage of the pension tax credit though, they must be over 65. Hair colour of grandparents, and moon phases are beyond the scope of these rules and my understanding of them :)
I am 66 with a LIF and a RIF CPP and OAS. My wife is 46 with no income.
Can I income split anything?
LIF and RIF yes, CPP and OAS no.
Thanks Mark! Great coverage of the various components..including the fact the RRSP withdrawal are not eligible even if one thinks that it is "pension income". Would be good to mention that the spouse (recipient) does not need to be over 65 years of age..only the contributor needs to be over 65. Another important point to mention in examples which provide income and taxes/savings figures, one should be wary of the various provincial brackets for Canada to determine the correct estimated savings
Happy New Year Mark. Love your videos. I have some questions - I turned 65 in Dec 2023. Can I income-split for tax year 2023? Do I need to wait till 2024? I also received bridge benefits in 2023. Can I income-split that too? As well, can I claim the pension income tax credit for 2023? Would appreciate your thoughts. Many thanks. Mark.
Great questions. You can split your registered pension benefits with a spouse or common-law partner regardless of your age. I believe the bridge would likely qualify here. Since you were 65 years old at the end of the tax year, you can split your RRIF income with your spouse, even if they are not yet 65. You can claim the pension income tax credit as well since you were 65 at the end of the tax year. The portion of the bridge that you split with your spouse should avail them to the pension income tax credit as well. I think I should do a retirement income splitting Q&A video because I've been getting a lot of these lately :). Thanks for watching!
I would like to ask you about income splitting.
My husband and i are both collecting pension but I'm still working.
I know we can split a RRIF and a LIV but because I still have a regular income plus CPP and OAS can I also split my regular income?
My husband has a lower income but would like to split his RRIF with me.
I guess after listening to the video one more time regular income is not eligible.
Thank you in advance.
Hey Mark, I have another question that no seems to be able to clearly answer….. Last year I converted one of my RRSP to a RIFF and I am withdrawing the minimum amount. I recently discovered that I no longer need the minimum amount. Is there a way to convert part of my RIFF back to an RRSP so I can reduce my minimum withdrawal amount ? (I am 64). Any feedback is appreciated.
Yes, you can directly transfer funds from your RRIF back to your RRSP on a tax-sheltered basis as long as you are not past your age 71 year. This does not require additional RRSP contribution room.
If you want to re-contribute the minimum that you have to collect in 2024 (3.85% of your RRIF balance on December 31, 2023), you DO need RRSP contribution room for that small portion.
Hope that helps.
@@WalhoutFinancial That is wonderful news!, thank you Mark. Can you clarify what you mean by "a tax-sheltered basis" ? Does this require that a specific form needs to be completed or a process that needs to be followed ? (Also thanks for the tip on re-contribution of the minimum, but will probably not need to do this at this time). Cheers Rick
@@rickstanhope7154 tax-sheltered, meaning you won't realize income for the amount transferred directly between your RRIF and RRSP in the year of the transfer. I haven't done this myself, but I think the forms will be a fairly straightforward internal transfer form at your financial institution. Definitely work closely with your advisor to make sure this is done with care.
Great video Mark. Is Retirement RIFF Income splitting done at the end of the year by filling out government forms when completing your income tax, or do you have to actually deposit money into your spouses account ?
Thanks Rick. It’s all handled on the tax return. No need to deliver cash to different bank accounts.
Hey Mark, me again... Based on my research, OAS payments do not count against your GIS eligibility, and GIS eligibility is primarily based on your on your previous years Net Income. However I noticed that when completing my income tax, that OAS is bundled into my Net Income. If the above is true, how do I split out OAS from my Net Income ?
Hi Rick. You are right. OAS is not included in the GIS calculation. The CRA will do this calculation when calculating your eligibility for GIS. You don’t need to amend your return for this purpose. If you have more detailed questions feel free to set up a time with me.