If both spouses are in the same tax bracket, income
splitting will not provide the benefit of a reduction in the marginal tax
rate. However, pension splitting may still be useful if it creates
or increases a pension
tax credit for the spouse.
See our articles on different methods of income
Pension income splitting
Sharing your CPP retirement pension with a spouse
Transfer dividend income
to a spouse - In some circumstances, Canadian dividend income may be included in the income
of either spouse.
capital losses to a spouse - using superficial loss rules
and RRIFs, and attribution rules
money to your spouse or child
Other income-splitting ideas:
| Claiming tax credits and
deductions with a spouse|
|Other investment income earned in a joint account|
income by employing your spouse or child
If you are self-employed, you can employ your
spouse or your children. The spouse or children must be paid a reasonable wage for services
performed. See also Don't
pay unnecessary unemployment insurance premiums on our
Small Business page.
Have the lower income spouse invest all earnings
If both spouses are earning income, but one is in a much
higher tax bracket, the lower income spouse could invest all
earnings, while household and other expenses are paid by the
higher income spouse.
Revised: February 19, 2014