# T1213 - subtracting income not subject to tax deductions



## Eclectic12 (Oct 20, 2010)

Hi Folks:

For the last couple of years, I've filed a T1213 form to reduce tax deductions at source for tax year ####.

This year when I filed for 2014 - they sent the form back saying I needed to put something other than zero into the line "Subtract income not subject to tax deductions at source". The examples on the form included "interest", "net rental" or "self-employed income".

My interest income is about $300 or so but I'm wondering if I need to include dividends & possibly REIT cash distributions as well?


I plan to call CRA but won't have the time for about a week or so & thought I'd ask here in the meantime.



Cheers


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## OptsyEagle (Nov 29, 2009)

Not sure what the question is. I would put the $300 in and send it back to them. Perhaps they know you have had this type of income before and figured you probably still do. If you put $5000 in RRSPs but have $25,000 of interest income, that has had no withholding, they may just decline your request ...and probably rightfully so.

You won't know until you send it in.


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## Eclectic12 (Oct 20, 2010)

OptsyEagle said:


> Not sure what the question is. I would put the $300 in and send it back to them.


So you are saying skip the dividend/REIT income and only include the interest income (which to be clear, my question was should I include the dividend/REIT income).




OptsyEagle said:


> Perhaps they know you have had this type of income before and figured you probably still do.


 ... not sure why as I've had all three types for over ten years yet they are asking for a non-zero entry in the year I have the lowest totals for each type.




OptsyEagle said:


> ... If you put $5000 in RRSPs but have $25,000 of interest income, that has had no withholding, they may just decline your request ...and probably rightfully so.


The other aspects that make no sense to me are that:

1) the numbers are closer to $16K in RRSPs, $300 in interest and about $6K in dividends/REIT income. 


& 2) I haven't hit the optimum setup yet - so that despite putting $0 in for this line last year as well as a higher dividend income, the net result was a bigger than I would like refund.


Cheers


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## OptsyEagle (Nov 29, 2009)

My guess is that CRA has received numerous numbers of these requests, only to later find out that many of them end up owing some tax payable, at the end of the year. This would frustrate them greatly.

Perhaps this is a knee jerk reaction to try to weed out the ones that end up owing money to them from the legitimate ones that just want to reduce their year end refund, somewhat.

All of this is just a guess on my part. Since you cannot possibly know for sure how much other income you will receive, IN THE FUTURE, you can put any number you want on that line, without being held accountable, so as to push the request through. Just keep an eye on the fact that if I am right, they may reduce your requested amount a little, or if the number is too large, decline your request completely.


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## Eclectic12 (Oct 20, 2010)

OptsyEagle said:


> My guess is that CRA has received numerous numbers of these requests, only to later find out that many of them end up owing some tax payable, at the end of the year. This would frustrate them greatly.
> 
> Perhaps this is a knee jerk reaction to try to weed out the ones that end up owing money to them from the legitimate ones that just want to reduce their year end refund, somewhat.


Possibly ... though if the CRA rep in question is pulling up my history, there's a long unbroken string of refunds - which is why I want to file the T1213 in the first place. 




OptsyEagle said:


> Since you cannot possibly know for sure how much other income you will receive, IN THE FUTURE, you can put any number you want on that line, without being held accountable, so as to push the request through.
> 
> Just keep an eye on the fact that if I am right, they may reduce your requested amount a little, or if the number is too large, decline your request completely.


If I want to play it safe - I can dump in last year's numbers as I know I have other deductions that would take care of small differences.

The reason I was wondering about the dividends is how one interprets "not subject to tax deductions at source" - the dividend corp is paying some taxes so that might mean I don't have to include them.

The REITs on the other hand, are paying a reduced tax as the bulk of the payments are supposed to be taxed at the receiver's tax rate (or at least that's my understanding).


.... it's getting close to when I'll have time to call CRA so I'll post an update when I have one.


Cheers


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## OptsyEagle (Nov 29, 2009)

I would make the number as low as possible, but higher then zero. As long as you have some defense for it and even if you don't, I am sure you will be OK.

Hey the government had a choice when they came up the tax code. They could have made it simple or complicated. They went with the latter and now they need to live with what happens next. 

Good luck.


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