Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Are amounts transferred from an RPP to an RRIF and subsequently paid from the RRIF eligible for the pension income amount?
Position: Only if the amounts paid from the RRIF are "qualified pension income".
Reasons: Definition of "qualified pension income in subsection 118(7) of the Act.
Signed on September 11, 2006
XXXXXXXXXX
Dear XXXXXXXXXX:
I am replying to your letter addressed to XXXXXXXXXX, concerning the qualification of amounts received from a registered retirement income fund (RRIF) for the pension income amount on the Income Tax and Benefit Return. I received a copy of your letter from XXXXXXXXXX on XXXXXXXXXX.
The Income Tax Act allows a taxpayer who has not reached age 65 by the end of the calendar year to claim a pension income amount if he or she has received "qualified pension income". The Act specifically defines "qualified pension income" and, as you noted, payments out of a RRIF, other than those that are received as a consequence of the death of the taxpayer's spouse or common-law partner, are not included in the definition. Please note that a married taxpayer under the age of 65 receiving a payment out of a RRIF, other than as a result of the death of the taxpayer's spouse or common-law partner, is not eligible to claim the pension income amount.
The Canada Revenue Agency is responsible for administering and enforcing the Act and the Income Tax Regulations as enacted by Parliament. Any proposed changes to tax policy or amendments to legislation would have to be considered by the Minister of Finance and approved by Parliament. I am therefore forwarding a copy of your letter to the Honourable James M. Flaherty, Minister of Finance, for his consideration.
Thank you again for having taken the time to write.
Sincerely,
The Honourable Carol Skelton, P.C., M.P.
c.c.: The Honourable James M. Flaherty, P.C., M.P.
Minister of Finance
House of Commons
Ottawa ON K1A 0A6
Gary Allen
952-9853
August 29, 2006
2006-020125
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