Dale Jackson

Personal Finance Columnist, Payback Time

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ANALYSIS: The Family Tax credit is about to become a footnote to the Stephen Harper Conservative era. Justin Trudeau, the Liberal, killed it.

But if you’re the parent of a child under 18 and your spouse made less than you in 2015, there’s one last chance to reap the Family Tax credit reward this tax season.

Up to $50,000 of income can be taxed in the hands of the lower income spouse, who is also in a lower federal and provincial tax bracket. The tax savings are capped at $2,000.

Pension income splitting still allowed

Fortunately, many retirees can still split pension income. Up to 50 per cent can be transferred to a lower income spouse, putting the higher income spouse in a lower tax bracket and possibly avoiding an Old Age Security (OAS) claw back.

However, not all pension income — including some company pension plans — can be split prior to age 65. That’s when it’s best to plan ahead by having the higher income spouse contribute to a spousal Registered Retirement Savings Plan (RRSP), where contributions go into the lower income spouse’s RRSP, but the tax deferral can be used by the higher income spouse.

If you choose to contribute to a spousal RRSP, it’s important to keep in mind that those contributions will be deducted from your total RRSP contributions space, and not the lower income spouse.

The amount of RRSP contribution room you have is listed on your latest tax return statement from the Canada Revenue Agency (CRA).