Tax forms for residency

[gradguy]

Does anyone know if there some sort of CRA form that I can sign that reduces the amount of taxes taken out of my residency paycheque? I have >$100K in tuition tax credits and would prefer to have fewer tax deductions throughout the year rather than a large tax return next spring...

[Laika]

Are you 1T4 as your signature implies, or are you starting residency now?

 

When I arranged for direct deposit for residency pay, my school also supplied the appropriate TD1 forms.

[NLengr]

It's an application to limit deductions at source. I can't remember to T#, but google it.

 

You also need to remember to tell them to stop limiting deductions when you run low on tax credits or they will continue indefinitely.

[ubcredfox]

The forms you need are the T1D (federal) and T1xx(where xx is your province). You put in the number of tuition credits you have, or just write $80,000 on the bottom line. Sign and your off to the races.

[KennethToronto]

For Ontario, it might be this one? http://www.cra-arc.gc.ca/E/pbg/tf/t1213/

 

not sure.

[gradguy]

Thanks for the replies.

 

FYI, my significant other is graduating, but I thought it would be easier to ask questions in the first person rather than explain the situation

 

We were confused about the difference between the T1213 and the TD1. Both forms seemed appropriate, and yet both seemed inappropriate at the same time (you'll know what I'm talking about when you read the wording). Anyway, my significant other called up the CRA and spoke with someone, and after a long, drawn out conversation (that I was hoping to avoid by posting here... ), we finally found out that you should put all of your unused tuition credits into the TD1 form (despite the fact that the TD1 form asks for the current year's tuition amounts only) in order to reduce your taxation throughout the year.

 

Hopefully someone will find this useful in the future!

[Laika]

Yeah, the wording on the form is completely unclear!

[KennethToronto]

Thanks for the replies.

 

FYI, my significant other is graduating, but I thought it would be easier to ask questions in the first person rather than explain the situation

 

We were confused about the difference between the T1213 and the TD1. Both forms seemed appropriate, and yet both seemed inappropriate at the same time (you'll know what I'm talking about when you read the wording). Anyway, my significant other called up the CRA and spoke with someone, and after a long, drawn out conversation (that I was hoping to avoid by posting here... ), we finally found out that you should put all of your unused tuition credits into the TD1 form (despite the fact that the TD1 form asks for the current year's tuition amounts only) in order to reduce your taxation throughout the year.

 

Hopefully someone will find this useful in the future!

 

That's interesting because I emailed the PGME office with the same question and was directed to the T1213 form. Also, the TD1 form directs me to the same T1213 form (check the back, under "reduction in tax deductions").

 

On the same topic, under #5 (Tuition, education, and textbook amounts), do residents qualify as full time students?

[cheech10]

Yes, residents are full time students as far as CRA is concerned (ie, your T2202A states that you are a full time students for 12 months of the calendar year).

[rmorelan]

Yes, residents are full time students as far as CRA is concerned (ie, your T2202A states that you are a full time students for 12 months of the calendar year).

 

annoying we aren't for OSAP purposes though. oh well

[silverjelly]

It's definitely the T1213 form, as I filled it out last year and am waiting on my approval this year for the same. I believe everyone fills a TD1 form; this is what they use to calculate your taxable income and yada yada.

 

The T1213 is specifically used to decrease income tax taken out of your pay stubs.

[japlanet]

It's definitely the T1213 form, as I filled it out last year and am waiting on my approval this year for the same. I believe everyone fills a TD1 form; this is what they use to calculate your taxable income and yada yada.

 

The T1213 is specifically used to decrease income tax taken out of your pay stubs.

 

I'm confused about this, if based on your TD1 they calculate that your taxable income will be 0, why would you need another form to get them to actually not withhold the tax?

 

Edit: the answer is on the T1213 itself

 

Use this form to ask for reduced tax deductions at source for any deductions or non-refundable tax credits that are not part of the Form TD1,

Personal Tax Credits Return.

 

So you only need a T1213 if you want to have less tax withheld than your TD1 would suggest (and tuition tax credits, for instance, are covered on the TD1). Basically this is only if you have a lot of capital loss deductions/alimony or want your RRSP deductions at the source rather than at the end of the year.

[KennethToronto]

So you only need a T1213 if you want to have less tax withheld than your TD1 would suggest (and tuition tax credits, for instance, are covered on the TD1). Basically this is only if you have a lot of capital loss deductions/alimony or want your RRSP deductions at the source rather than at the end of the year.

 

I think the T1213 is worthwhile if you are sitting on a pile of educational tax credits. Better to apply them at the source rather than waiting to the end of the year - because you're basically "lending" the government money and getting nothing in return for it!

[japlanet]

I think the T1213 is worthwhile if you are sitting on a pile of educational tax credits. Better to apply them at the source rather than waiting to the end of the year - because you're basically "lending" the government money and getting nothing in return for it!

 

My point is that if you want your withheld taxes adjusted because of tuition tax credits, then the TD1 takes care of that. Only if you wanted those withheld taxes adjusted for some other reason that is NOT covered by the TD1 would you need to file a T1213.

 

If you have enough tuition tax credits to not pay any income tax, then nothing will be withheld and all you have to do is the TD1.

 

The TD1 says

 

You can ask to have less tax deducted if on your income tax return you are eligible for deductions or non-refundable tax credits that are not

listed on this form (for example, periodic contributions to a Registered Retirement Savings Plan (RRSP), child care or employment expenses,

and charitable donations). To make this request, complete Form T1213, Request to Reduce Tax Deductions at Source for year(s) ____, to get

a letter of authority from your tax services office.

 

Not sure how that can be more clear.

 

The T1213 doesn't even have a place for tuition tax credits.

[silverjelly]

My point is that if you want your withheld taxes adjusted because of tuition tax credits, then the TD1 takes care of that. Only if you wanted those withheld taxes adjusted for some other reason that is NOT covered by the TD1 would you need to file a T1213.

 

If you have enough tuition tax credits to not pay any income tax, then nothing will be withheld and all you have to do is the TD1.

 

The TD1 says

 

 

 

Not sure how that can be more clear.

 

The T1213 doesn't even have a place for tuition tax credits.

 

The TD1 certainly does not cover that; like I said, it's mainly for determining taxable income. And you're right, there isn't a spot on the T1213 for education credits, but there is an "other" section that you tick off and you're allowed to provide explanation. What I did was attach a short paragraph describing how I wanted to use my many (many!) education credits to have less tax withheld from my paycheques.

[japlanet]

The TD1 certainly does not cover that; like I said, it's mainly for determining taxable income. And you're right, there isn't a spot on the T1213 for education credits, but there is an "other" section that you tick off and you're allowed to provide explanation. What I did was attach a short paragraph describing how I wanted to use my many (many!) education credits to have less tax withheld from my paycheques.

 

Sorry, I'm still confused. If

 

your taxable income = your income - tutition credits

 

then why would you need to file another form for them to not withhold based on your tuition credits? If they are withholding based on your taxable income that should already take those credits into account.

[jmlconkl]

Hey Guys, just read through this thread and am still a bit confused. From what I understand, if my goal is to have NO deductions from my paychecks, and I plan to accomplish this by making use of my $80,000+ of tuition credits, I should do the following:

 

1. Fill out my TD1 and put $80,000 under Section 5 "Tuition, education, and textbook amounts (full time and part time)", even though the lengthy description beside this box doesn't specifically mention tuition credits.

 

2. Check the box on the back for "Total income less than total claim amount".

 

And that's it. It doesn't sound like T1213 would be necessary as long as we are sure it is ok to use tuition credits in Section 5 of the TD1. Please correct me if this is wrong.

 

Thanks!

[japlanet]

Hey Guys, just read through this thread and am still a bit confused. From what I understand, if my goal is to have NO deductions from my paychecks, and I plan to accomplish this by making use of my $80,000+ of tuition credits, I should do the following:

 

1. Fill out my TD1 and put $80,000 under Section 5 "Tuition, education, and textbook amounts (full time and part time)", even though the lengthy description beside this box doesn't specifically mention tuition credits.

 

2. Check the box on the back for "Total income less than total claim amount".

 

And that's it. It doesn't sound like T1213 would be necessary as long as we are sure it is ok to use tuition credits in Section 5 of the TD1. Please correct me if this is wrong.

 

Thanks!

 

This is my understanding as well. I ran it by my Mom's accountant and he agrees too.

[silverjelly]

This is my understanding as well. I ran it by my Mom's accountant and he agrees too.

 

From personal experience, the T1213 is absolutely necessary, but I'll let you see if that works for you. Good luck.