Thursday, January 10, 2008

Senior income splitting -- not so fast

Seniors' groups were crowing in 2006 when PMS announced senior couples would be allowed to split pension income -- not just allocations from the CPP, RRQ and OAS, but private pensions and RRSPs too.

I defy you to find where you can find that on this year's tax return. Actually, you can't.

You have to file an election on a completely separate form -- T1032 -- and file two separate ones, one for each spouse, with the tax returns by the tax deadline or you're out of luck. Oh, and this election has to be made each and every year.

This may be one of the rare cases where a joint return may be justified; especially couples who have been married fifty years or more and still have great sex. People have to elect to split their income, or they'll be accused of tax fraud? Even elderly people who have always abided by the tax rules and have no reason to cheat now?

That's the Flaherty Finance Department for you.

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