The senior tax credits one spouse can hand to the other

In many retired couples, one partner has a reasonable income and pays tax, while the other has so little taxable income that they owe nothing at all. The second partner still has tax credits available to them: an age amount, perhaps a pension income amount, perhaps a disability amount. On their own return, those credits have nothing to reduce. The tax system allows some of them to cross the kitchen table.

This is part two of our series When there are two of you.

Credits that would otherwise go unused

Most federal credits for seniors are non-refundable. They can reduce tax owing to zero, but they cannot create a refund on their own. When a person’s income is already low enough that they owe no federal tax, their non-refundable credits simply lapse unless something else is done with them.

Line 32600 of the federal return, “amounts transferred from your spouse or common-law partner,” exists for that situation. It lets one partner claim the portion of certain credits that the other partner did not need to bring their own federal tax down to zero.

Which amounts can move

The CRA lists the amounts that can be transferred between spouses or common-law partners on line 32600:

• the age amount (line 30100);
• the Canada caregiver amount for infirm children under 18 (line 30500);
• the pension income amount (line 31400);
• the disability amount for self (line 31600); and
• tuition, education and textbook amounts (line 32300), within their own limits.

For most retired couples, the first, third and fourth are the ones that matter. Other credits, including other caregiver amounts and the basic personal amount, are not on this list.

The age amount, and the income that shrinks it

Anyone who is 65 or older at the end of the year can claim the age amount, but it is reduced as income rises. For the 2025 tax year, the return most people filed in spring 2026, the CRA says a person with net income of $45,522 or less claims the full $9,028; above that, it shrinks, and it is no longer available once net income reaches $105,709.

For the 2026 tax year, the CRA’s indexation table sets the age amount at $9,208, with the reduction starting at net income of $46,432. The reduction is calculated on the lower-income partner’s own income, which is exactly why that partner usually has the full amount available to transfer.

The pension income amount, and what counts

The pension income amount is a credit on up to $2,000 of eligible pension income. The question that trips people up is what counts as eligible. The CRA’s table for line 31400 is explicit: Old Age Security and Canada Pension Plan benefits do not qualify.

For a person aged 65 or older, eligible income includes, among other things, payments from a registered pension plan, and income from a RRIF or an annuity. Under 65, the list is narrower: life annuity payments from a registered pension plan qualify, while RRIF income generally qualifies only when received because of a spouse’s death. A partner whose only income is OAS and CPP therefore has no pension income amount to transfer.

What a transfer is worth

Non-refundable credits are valued at the lowest federal tax rate. The Department of Finance confirms that this rate was reduced to 14.5% for the 2025 tax year and to 14% for 2026 and later years. A transferred amount of $1,000 is therefore worth $145 of federal tax on a 2025 return, and $140 on a 2026 return. Provinces have their own versions of these credits, transferred on the provincial schedule, which adds to the value.

A worked example

Example: 2025 tax year, federal only

Partner A, 72: net income, owes no federal tax$14,000

A’s unused age amount$9,028

A’s unused pension income amount (has $2,000+ of RRIF income)$2,000

Total transferred to Partner B on line 32600$11,028

Federal tax reduction for B, at 14.5%about $1,599

Hypothetical couple, assuming A’s income is low enough that none of these amounts was needed on A’s own return and that B has at least this much federal tax to reduce. Provincial credits are not included. Actual results depend on both returns.

In this example, the money does not appear as a payment. It shows up as a lower tax bill, or a larger refund, on Partner B’s return. That is easy to overlook in a household where each person files separately without comparing notes.

How it is done on the return

The transfer is calculated on Schedule 2, Federal Amounts Transferred From Your Spouse or Common-Law Partner, and the result goes on line 32600 of the receiving partner’s return. The provincial equivalent is the provincial Schedule S2. Tax software generally prompts for it when both partners’ returns are prepared together; when returns are prepared separately, it is worth checking that it has been done.

Line 32600 is a different tool from pension income splitting, which moves part of eligible pension income itself from one partner to the other by joint election. A couple may benefit from one, the other or both. The disability amount, which can also be transferred, has its own eligibility process, set out in the disability tax credit and why it opens more than one door.

Who this matters for, and what to check

• Couples where one partner owes no federal tax and is 65 or older.
• Couples where the lower-income partner has RRIF or workplace pension income.
• Couples where one partner has been approved for the disability tax credit.
• Anyone reviewing past returns: the notice of assessment in CRA My Account shows what was claimed on line 32600.

When one partner dies, these transfers come to an end for future years, which is one more reason the household’s tax position changes after a death; see why a CPP pension and a CPP survivor’s pension don’t simply add up for the pension side.

The takeaway

Credits that one partner cannot use need not be lost. The age amount, the pension income amount and the disability amount can move to the other partner on line 32600, valued at the lowest federal rate. For a couple with unequal incomes, a few minutes spent on Schedule 2 can be worth more than many people expect.

Next in the series · Part 3

Why a CPP pension and a CPP survivor’s pension don’t simply add up