Note: the information in this article is provided for educational purposes. For information or clarification about your specific tax situation, refer to Canadian legislation or contact the Canada Revenue Agency.
Trying to decide how to get the best tax benefit out of your RRSPs? Perhaps you should explore a spousal RRSP, especially if one person is in a higher tax bracket than the other.
You can contribute to a plan in your spouse or common-law partner's name. The contributor (you) is entitled to the tax deduction. Your spouse or common-law partner owns the plan.
This allows the person in the higher tax bracket to get a tax deduction while building retirement income for the lower-earning person. When it comes time to withdraw funds from the plan, the tax burden won’t fall to one person and this has the potential to keep both parties in a lower tax bracket.
Note that contributions you make to a spousal or common-law partner RRSP reduce your own RRSP deduction limit. So if you have already reached your deduction limit, you can’t contribute to a plan in your spouse or partner’s name and claim the tax deduction.
Spouse – a person to whom you are legally married.
Common-law partner – a person who is not your spouse, with whom you are living in a conjugal relationship for at least 12 continuous months. The period can be less than 12 months if your partner is the parent of your child by birth or adoption or has custody and control of your child and your child is wholly dependent on that person for support.
Canada Revenue Agency