Ever look at your paycheck and think, "Damn, that's a lot of tax being withheld"?

You're not alone.

Overpaying every month can cut deep, especially when that money could fuel your RRSP, cover childcare, or just make life a bit more manageable.

The T1213 form is your secret weapon to keeping more cash in your wallet year-round. But here's the catch: messing it up can mean headaches, processing delays, and missed savings. Knowing exactly how and when to fill this form can make a big difference in your financial health.

Luckily, in this article we'll cover:

• What the T1213 form is and how to complete it
• Benefits of using the form and scenarios when it's a must
• Pro tips for accurately estimating deductions

Ready? Let's go!

By the way — are you a homeowner who needs more cash for your retirement fund? Taxes can take a while, but Lotly can help. We work with 50+ trusted lenders across Canada to find you the best rates and secured home loan options for your financial goals. Book a free consultation today to learn more.

What is the T1213 form used for?

The T1213 form, also known as the Request to Reduce Tax Deductions at Source, is used by individuals who want to reduce the amount of tax deducted from their income at source.

This form allows taxpayers to request a reduction in tax deductions based on certain expenses or deductions they expect to claim during the year.

How to complete the T1213 form

Step 1: Determine Eligibility

Confirm that you qualify to use the T1213 form. This is typically for individuals expecting significant deductions or non-refundable tax credits, such as Registered Retirement Savings Plan (RRSP) contributions, childcare expenses, medical expenses, or employment-related costs.

Examples:

• High RRSP contributions.
• Large medical expenses eligible for deduction.
• Deductible spousal support payments.

Common Points of Confusion:

• Many people mistakenly believe they can use the T1213 for any tax-related adjustments.
• However, it only applies to deductions and credits not accounted for in the TD1 form.

Pro Tip: If you’re unsure about eligibility, consult a tax professional or use CRA’s resources to confirm your situation.

Step 2: Download and Prepare the Form

Obtain the latest version of the T1213 form from the CRA website. You can fill it out electronically using Adobe Acrobat Reader or print it and complete it manually.

Examples: The form can be downloaded directly from CRA’s official site or requested in alternate formats (e.g., braille).

Common Points of Confusion: Forgetting to use an updated version of the form may lead to delays in processing.

Pro Tip: Use Acrobat Reader to avoid compatibility issues when filling out the PDF electronically.

Step 3: Complete the Form Accurately

Fill out your personal information (name, address, SIN) and provide details about your employer or pension administrator. Clearly list all anticipated deductions and non-refundable credits with supporting documentation.

Examples:

• Enter expected RRSP contributions under "Deductions from Income."
• Include child care receipts for child care expense deductions.

Common Points of Confusion:

• Miscalculating totals or omitting required documentation can result in rejection by the CRA.
• Ensure all figures are accurate and supported by evidence, such as receipts or contribution statements.

Pro Tip:

• Double-check calculations for lines like Line 12 (total deductions) and Line 14 (net amount of deductions).
• Attach clear copies of supporting documents.

Step 4: Submit Your Application to CRA

Send your completed T1213 form along with supporting documents to your local CRA Tax Services Office by mail. The address is typically listed on the CRA website or on the form itself.

Examples: If you live in Ontario, submit your application to the relevant CRA office serving your region.

Common Points of Confusion: Some individuals mistakenly send their forms directly to their employer instead of the CRA, which is incorrect.

Pro Tip: Submit your application in October or November for approval before the start of the next calendar year, as processing can take 4 to 8 weeks.

Step 5: Wait for Approval from CRA

The CRA will review your submission and issue a "Letter of Authority" if approved. This letter allows your employer to reduce tax withholdings at source based on your anticipated deductions.

Examples: Approval might reduce monthly withholdings by a specific amount (e.g., $222/month for RRSP contributions).

Common Points of Confusion: The approval process is not automatic; incomplete forms or insufficient documentation may lead to rejection.

Pro Tip: Follow up with CRA if you do not receive a response within 8 weeks.

Step 6: Provide Letter of Authority to Your Employer

Once approved, give your employer the Letter of Authority from the CRA so they can adjust your payroll tax deductions accordingly.

Examples: If you contribute $9,000 annually to an RRSP, this adjustment will reflect reduced taxes withheld from each paycheck.

Common Points of Confusion: Forgetting this step means your employer cannot implement reduced withholdings even after CRA approval.

Pro Tip: Keep a copy of the letter for your records in case any discrepancies arise later.

Step 7 (Optional): Repeat Annually if Necessary

If your financial situation remains consistent, you’ll need to reapply each year as CRA does not automatically renew approvals.

Examples: If you continue making high RRSP contributions annually, submit a new T1213 each fall for approval before January.

Common Points of Confusion: Some assume that reduced withholdings carry over indefinitely once approved — this is not true.

Pro Tip: Set a calendar reminder each October to prepare and resubmit your application on time.

Requirements for filing the T1213 form

Let's go a bit deeper on Step 1 — below is an in-depth explanation of these requirements:

Personal information

Provide accurate and complete personal details to ensure proper identification and processing by the CRA:

• Details to Include:
  
  • Full Name: Ensure your legal name matches CRA records.
  • Social Insurance Number (SIN): This is crucial for identifying your tax account.
  • Address: Provide your current mailing address, including postal code.
  • Employer or Pension Administrator Information: Include the name and address of your employer or pension plan administrator, as they will implement the reduced tax deductions if approved.

Supporting documentation

You must attach evidence to substantiate the deductions or credits you are requesting. The type of documentation depends on the deductions or credits you are claiming.

1. RRSP Contributions: Provide RRSP contribution receipts or a statement showing planned contributions for the year.
2. Childcare Expenses: Attach receipts for childcare services, including the provider’s name, address, and SIN or business number.
3. Employment Expenses: Include a completed Form T2200 (Declaration of Conditions of Employment) and Form T777 (Statement of Employment Expenses) if claiming employment-related costs.
4. Spousal Support Payments: Submit a copy of your court order or written agreement detailing support payments, along with Form T1158 (Registration of Family Support Payments), if not previously filed.
5. Medical Expenses: Provide receipts or invoices for eligible medical expenses incurred or anticipated during the year.
6. Carrying Charges and Interest Expenses: Attach statements from lenders confirming loan amounts, interest payments, and their purpose (e.g., investment loans).
7. Other Deductions or Credits: For less common deductions like charitable donations or rental losses, include receipts or financial statements as applicable.

Additional filing conditions

Before filing the T1213 form, ensure you meet these prerequisites:

• You must have filed all prior-year tax returns, and they must be assessed by CRA.
• Any outstanding tax balances must be paid in full.
• If requesting reduced deductions for multiple years, you may need to submit separate forms for each year.

By providing accurate personal information and attaching comprehensive supporting documentation, you can streamline the approval process for reduced tax deductions at source. For further guidance, consult CRA resources or a tax professional.

Benefits of using the T1213 form

The T1213 form offers several benefits for taxpayers like you. These benefits include:

• Simplified process: By submitting a T1213 form, you can simplify the process of adjusting your tax deductions. Rather than waiting until the end of the year to receive a tax refund, you can have less tax withheld from each paycheck throughout the year.
• Less financial strain: Many individuals and families rely on their income to cover rent, groceries, and bills. By reducing your tax deductions at source, you can have more money available in your paycheck each month, which can help alleviate financial strain.
• Tax savings: Depending on your tax bracket and income level, adjusting your tax deductions can result in significant savings on your overall taxes. This means more money in your pocket for personal expenses or to invest in your future.
• Avoid penalties: If you typically owe a large amount of taxes at the end of the year, reducing your tax deductions at source can help prevent penalties for underpaying taxes. This is especially important if you are self-employed or have fluctuating income.
• Plan for the future: By adjusting your tax deductions, you can also plan for future expenses or changes in your financial situation. For example, if you know you will be purchasing a home or starting a family in the near future, increasing your tax deductions can help offset those costs when they arise.
• Maximize retirement contributions: If you are aiming to maximize your retirement savings, reducing your tax deductions at source can allow you to contribute more towards your retirement accounts. This can lead to significant long-term savings and help secure your financial future.

Fundamentally, the T1213 is an opportunity to keep more money in your pocket and have more control over your finances.

Tips for estimating deductions when completing the T1213 form

When completing the T1213 form, there are a few tips that can help you accurately estimate your tax deductions at source:

• Review previous years' returns: Look at your last year's tax return to get an idea of how much tax was deducted from your income. This can serve as a starting point for estimating deductions for the current year.
• Consider life changes: If you have experienced any significant life changes, such as marriage, having children, or buying a home, these could impact your tax deductions and should be considered when estimating.
• Consult a tax professional: If your income and deductions are more complex or if you have any questions, it is always advisable to consult a tax professional for personalized assistance.
• Keep track of deductible expenses: Throughout the year, keep track of any deductible expenses such as medical bills, charitable donations, and business expenses. This will help you accurately estimate your deductions at the end of the year.
• Be aware of changes in tax laws: Tax laws can change from year to year, so it is vital to stay informed about any updates that may affect your deductions.

Scenarios where you should file a T1213 form

• If you have significant RRSP contributions that exceed the maximum amount allowed by your employer's standard withholding practices, you should file a T1213 form.
• If you have eligible childcare expenses not being considered by your employer's standard withholding practices, you should file a T1213 form.
• If you have eligible employment expenses not being taken into account by your employer's standard withholding practices, you should file a T1213 form. These expenses can include home office and/or vehicle use for work purposes.
• If you have significant charitable donations that are not being taken into account by your employer's standard withholding practices, you should file a T1213 form. This will allow you to claim these donations as deductions on your income tax.

More money in your pocket today with Lotly

Let's recap some key takeaways:

• Confirm your eligibility carefully before starting the T1213 form. It's specifically for deductions or credits not already accounted for, like RRSP contributions, childcare, or significant medical expenses.
• Submit your T1213 directly to the CRA—not your employer—and attach all necessary supporting documents. Mistakes here, like missing receipts or outdated forms, commonly lead to delays or rejections.
• Remember, T1213 approvals don't automatically renew each year. Set a yearly reminder to reapply each fall, ensuring continuous tax savings without unexpected surprises.

Supplementing your income can get harder and harder in today's economy, especially with the uncertainty that surrounds us all the time. If you're a homeowner filling out the T1213 to keep some extra cash for retirement, medical expenses, or to supplement your self-employed income, Lotly can help.

We work with you to determine your financial situation. Then, we work with a handpicked network of over 50 lenders from across Canada to find the best secured home loan and line of credit options for your financial goals — even if your credit score isn't the strongest. And since they're secured, you get far more affordable rates. Book a free consultation today if you'd like to learn more.

Frequently asked questions

How long does it take to process T1213?

The processing time for a T1213 form can vary depending on several factors, such as the complexity of your financial situation and the volume of requests being processed by the Canada Revenue Agency (CRA).

Generally, it can take 4 to 6 weeks for the CRA to process a T1213 form. Submit your request well before any deadlines or due dates to ensure enough time for processing.

Why would an employee request a reduction in tax deductions at source?

In brief, an employee may request a reduction in tax deductions at source through a T1213 form if they believe their current tax deductions are too high and they want to reduce the amount being withheld from their paychecks. This could be for various reasons, such as having additional deductions or credits that lower their overall tax liability, or if they expect to earn less income during the year.