Personal Finance

need ways to reduce income tax withholding by employer

  • Last Updated:
  • Feb 27th, 2010 1:11 pm
Mar 3, 2006
62 posts
Toronto / San Jose

need ways to reduce income tax withholding by employer

For a variety of reasons (tuition credit, RRSP, potential job termination for going back to school, etc), I know that I am going to pay $0 dollar of federal and provincial income tax this year (2010).

Previously (in 2009), I've filled out an TD1 and an TD-ON1 to claim that my deduction amount is higher than my income of the year so that no tax should be deducted from my pay stub. However, I think because my profile salary (annual) is much higher than the deduction amount, a significant amount of federal income tax is still withheld from my biweekly pay stub.

I don't want the government to owe me $15 - 20k (federal tax amount) this year and give me back the money in April 2011. I rather put the money into my TFSA and I will also need the money before April.

Are there any ways I can prevent my employer from withholding income tax?

Here's one thought: When I was a student, I was able to do this because my tuition amount in that year was indeed higher than my income. Although this is not the case now (i'm paying $0 tuition in 2010), I still have a very large amount of tuition credit left over. Can I arbitrarily put a large amount in TD1 and TD-ON1 as tuition paid for this year?

2 replies
Deal Addict
Jan 5, 2003
3866 posts
You're on the right track with listing your deductions, etc. with the TD1 form. For stuff that's not captured on the TD1 form, you use the form here:

T1213 Request to Reduce Tax Deductions at Source for Year(s) _____

There's a field for "other", so I suppose you can even put down that you'll be going back to school, etc.
Deal Addict
User avatar
Apr 29, 2002
3855 posts
It's a T1213, you file it in to CRA for Oct/Nov, they get back to you with a ruling in Dec, you submit to your HR dept for Dec/Jan to ensure your income taxes are lower for the next year.