# T1213 - Request to Reduce Tax Deductions at Source



## leeder (Jan 28, 2012)

I'm interested in reducing the amount of taxes withheld from my biweekly pay cheque. For the past 2-3 years, I have regularly made full contributions to my RRSP. I intend to make full contributions in the years to come. From my readings, I understand I would have to provide proof to CRA that I make contributions to my RRSP. Couple questions: 

1) Do my contributions have to be part of the pre-authorized contribution plan? Right now, around April or so after I finish doing my taxes, I make a full lump sum contribution to my RRSP. (Note: I contribute after I complete my tax return instead of in January because I receive pension and need the pension adjustment info).
2) Is there an ideal time to submit the T1213 form (e.g., at the beginning of the tax year in January or after I submit a tax return)?

Thanks.


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## MoneyGal (Apr 24, 2009)

It has to be a PAC.

Editing to say I just went and checked the form, and it doesn't specify that it must be PAC but my understanding is they won't approve source deductions unless you have a PAC for RRSP contributions. Maybe stardancer can shed more light on this.


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## Eclectic12 (Oct 20, 2010)

leeder said:


> ... 1) Do my contributions have to be part of the pre-authorized contribution plan?
> 
> Right now, around April or so after I finish doing my taxes, I make a full lump sum contribution to my RRSP. (Note: I contribute after I complete my tax return instead of in January because I receive pension and need the pension adjustment info) ...


I didn't think so ... I seem to recall one of the examples on the "how to fill out the form" indicating that as long as you have an RRSP receipt to attach to the form (i.e. it's the contribution is already made) or proof of a schedule PAC, it was fine.

I've never done it for RRSP contributions so it might be worth a call to CRA to confirm.




leeder said:


> ... 2) Is there an ideal time to submit the T1213 form (e.g., at the beginning of the tax year in January or after I submit a tax return)?


CRA recommends that at latest, the T1213 form is mailed in Oct the year before the deductions are made so that there's plenty of time for them to either ask for more info/supporting docs or send the letter that you take in to your employer's payroll section (i.e. want the deductions in 2014, send the form by Oct 2013).

I sent my first one in for the same year and have been sticking to the October of the year before since then. Or another way to put it is that I sent two (one for the current tax year and one for the next tax year) in the first year and it's been one a year since.


Cheers


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## leeder (Jan 28, 2012)

Eclectic12 said:


> CRA recommends that at latest, the T1213 form is mailed in Oct the year before the deductions are made so that there's plenty of time for them to either ask for more info/supporting docs or send the letter that you take in to your employer's payroll section (i.e. want the deductions in 2014, send the form by Oct 2013).
> 
> I sent my first one in for the same year and have been sticking to the October of the year before since then. Or another way to put it is that I sent two (one for the current tax year and one for the next tax year) in the first year and it's been one a year since.


@ Eclectic: Can you please clarify on your last sentence regarding the first year? Hypothetically, if this was your first year sending the T1213 form and you are sending in October for the current tax year, why did you send a second one for the next tax year in the first year?

Also, by filling out the T1213 form, am I assuming that I will make a full RRSP deduction in my tax return? How would it work if I want to carry forward some of my deduction room for future years?


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## Eclectic12 (Oct 20, 2010)

leeder said:


> @ Eclectic: Can you please clarify on your last sentence regarding the first year?
> 
> Hypothetically, if this was your first year sending the T1213 form and you are sending in October for the current tax year, why did you send a second one for the next tax year in the first year?


In my case, it wasn't Oct for the first year ... as I recall, I sent the first one in July for the current tax year.

The point in the first year of sending the second form for the following tax year is that the one sent in July only covered the remainder of that tax year (i.e. when CRA sent their approval letter and I handed it over to payroll, there was less than half a year of pay to go). 

I knew I'd be doing the same thing the following year so sending a second form in Oct meant the approval letter from CRA for the following tax year was to payroll in plenty of time so that Jan 1 of the following year, less tax was withheld throughout the year.

So if it was 2013, without that second T1213 form - from say Aug 2013 through Dec 2013 would have had less taxes deducted. Jan 1, 2104, my employer would be deducting the usual tax up until I could give them another approval letter.


I suppose I could have send one in Oct for the following year and waited until the following year but the whole idea was to get the refund faster.


Or another way to put it - the T1213 form and approval letter are only good for one year. 
I'm not 100% sure why but suspect CRA wants to be sure nothing has changed year to year so as I recall from the fine print on the form, there's only one situation they will allow one T1213 form to cover at maximum two years of reduced taxes.




leeder said:


> Also, by filling out the T1213 form, am I assuming that I will make a full RRSP deduction in my tax return?


That's what I do for the charitable donations. I still report them but it all comes out in the wash as I've received the "refund" during the year. Filing the charitable receipts balances the tax return. If they weren't filed, the tax return would show that more taxes were owing than were deducted at source.

The bottom line is that you are changing when the refund money is received. So the required documentation, reporting on the tax return stays the same - it's just the T4 box for amount of taxes withheld is going to have a smaller number in it.




leeder said:


> How would it work if I want to carry forward some of my deduction room for future years?


I'd expect you'd either have to:

1) 
under report how much you are contributing to your RRSP (i.e. put into the RRSP $10K but only ask on the T1213 form for a reduction on $8K). This starts to get complicated so I'm not sure if CRA would let you do this repeatedly.

or

2)
make extra RRSP contributions, report them on the tax return but don't take the deduction (i.e. PAC puts into the RRSP $10K, the T1213 form asks for a reduction on $10K but you contribute on your own another $2K).


Cheers


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