# Income Splitting



## semigeezer (Oct 21, 2014)

I am currently 63, my wife is 61. We are both drawing early CPP and my wife has a small employment income which could disappear at any time.

Our main income has been tandem non-locked RRSP withdrawals, keeping our individual taxable income within the lowest tax bracket. My wife will deplete her non-locked RRSP this year. We both have locked-in RRSPs. I may come close to depleting my non-locked RRSP for our 2015 income. My locked-in RRSP is significantly larger than hers.

For 2015 and beyond, I have only looked into income splitting with a cursory scan, but it appears that straight RRSP withdrawals are not qualified for income splitting and that converting to an annuity or RRIF would be necessary in order to make them qualified for income splitting. Comments or suggestions?


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## Guban (Jul 5, 2011)

Converting your income to a RRIF would not make them qualifying for income splitting either. The person receiving the income must be able to claim the pension amount, and assuming that the registered investments are not from the death of a (former) spouse, RRSP/RRIF/annuity withdraws do not count until age 65.


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## OptsyEagle (Nov 29, 2009)

and yes, withdrawals from an RRSP will never qualify. It needs to be a RRIF or an Annuity.


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## leslie (May 25, 2009)

But at age 65 you don't need to convert the whole RRSP into a TFSA. Do just enough to fund you draws until age 71.


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## rikk (May 28, 2012)

semigeezer said:


> I am currently 63, my wife is 61. We are both drawing early CPP and my wife has a small employment income which could disappear at any time.
> 
> Our main income has been tandem non-locked RRSP withdrawals, keeping our individual taxable income within the lowest tax bracket. My wife will deplete her non-locked RRSP this year. We both have locked-in RRSPs. I may come close to depleting my non-locked RRSP for our 2015 income. My locked-in RRSP is significantly larger than hers.
> 
> For 2015 and beyond, I have only looked into income splitting with a cursory scan, but it appears that straight RRSP withdrawals are not qualified for income splitting and that converting to an annuity or RRIF would be necessary in order to make them qualified for income splitting. Comments or suggestions?


Glad I came across this thread ... was concerned about all that tax on the future RRIF ... not so much anymore. Here's a good overview that pretty much says what everyone here is saying ... http://www.theglobeandmail.com/glob...plitting-on-rrif-withdrawals/article17179917/


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## semigeezer (Oct 21, 2014)

Guban said:


> Converting your income to a RRIF would not make them qualifying for income splitting either. The person receiving the income must be able to claim the pension amount, and assuming that the registered investments are not from the death of a (former) spouse, RRSP/RRIF/annuity withdraws do not count until age 65.


So you are saying that my wife would have to be 65 by the end of the tax year in which I would first be able to income split proceeds from my RRSP funds converted to a RRIF/Annuity/LIF ? I haven't found where that is stated explicitly but I'll keep checking. Sounds like 2015, 2016 and 2017 will have to have me claim the full RRSP withdrawals as income and claim her as a dependant. Then in 2018 when she turns 65, we can start the income splitting process, correct?


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