Splitting CPP Benefits Can Save Tax Dollars

Those over the age of 65 can be subject to clawbacks of the age amount and the Old Age Security at certain income levels.

One way to stay out of the clawback range is to split the Canada Pension Plan benefits between spouses.

The rights to retirement benefits may be assigned to a spouse, including a common-law spouse. This is a great way to transfer taxable income to the lower earner, who is taxed at a lower bracket.

You may wish to look into applying for the income splitting option after preparing a preliminary tax calculation. If you conclude that tax savings will result if the assignment is made, apply for the assignment at Human Resources Development Canada.