RRSP withdrawals, pensions, and other income sources
Amounts to be included in income for year
Section 56 includes in income various amounts not covered by employment or business income — RRSP withdrawals, pension payments, alimony received, EI benefits, RESP withdrawals, and more.
Plain-language explanation
Section 56 is the "catch-all" income inclusion provision for individuals. The most important items:
s.56(1)(a) — Pension and annuity income: Payments from RPPs, annuities, and deferred profit-sharing plans are fully taxable.
s.56(1)(h) — RRSP withdrawals: When you withdraw from an RRSP, the full amount is included in your income in the year you receive it (not just the growth — the original contribution, which you deducted in the year made, is also taxable on withdrawal).
s.56(1)(r) — EI benefits: Employment Insurance payments received are income. Your employer's ROE determines your insurable earnings.
s.56(1)(n) — Scholarships: Scholarship income received by a full-time student is generally exempt (the "full exemption" applies). Part-time students get a more limited exemption.
RESP withdrawals: Educational assistance payments (EAPs) from an RESP are included in the student's income, not the subscriber's — usually at a very low tax rate.
Support payments (old rules): Periodic spousal support received under a court order made before May 1997 (or qualifying post-1997 orders) is included in income. Child support received is not income.
Example
Gord retired and withdraws $40,000 from his RRSP in 2026. The full $40,000 is income under s.56(1)(h). He also receives $18,000 from his employer's RPP. Total income: $58,000, taxed at his marginal rate.
Amendment history
Significant changes to this provision. Older versions help you understand rules that applied in prior tax years.
CERB (Canada Emergency Response Benefit) and CRB (Canada Recovery Benefit) introduced as COVID-19 relief. Payments under these programs are taxable under s.56. Recipients received gross amounts with no tax withheld at source on CERB, leading to unexpected tax bills for many.
Before
No COVID benefit programs
After
CERB ($2,000/4 weeks), CRB, CRSB, CRCB added as income inclusions under s.56. CERB had no withholding; CRB had 10% withholding
Common questions
Are RRSP withdrawals taxable? +
Yes, 100%. Every dollar you withdraw from an RRSP is included in your income in the year of withdrawal. This is why RRSP withdrawals in high-income years are costly — you may pay more tax on withdrawal than you saved on the original contribution.
Is child support taxable? +
No. Child support received under a court order or written agreement made after April 30, 1997 is not included in the recipient's income and not deductible by the payer. Spousal support (alimony) continues to be income to the recipient and deductible by the payer.
Are EI benefits taxable? +
Yes. EI benefits are included in income under s.56(1)(r). They are subject to income tax withholding by Service Canada, and high-income earners may be required to repay a portion (the "social benefits repayment" or EI clawback).
Key terms
Related sections
Related calculators
Related guides
Source: Income Tax Act, RSC 1985, c. 1 (5th Supp.), section 56. — Read the official text on Justice Canada
These summaries are for educational purposes only and do not constitute legal or tax advice. Speak with a CPA for advice on your specific situation.