New CRA Requirements for Reducing Tax Deductions at Source for Clergy
July 30, 2009
Recently, the Canada Revenue Agency (CRA) made retroactive technical changes to the requirement to file form T1213 (Request to Reduce Tax Deductions at Source) for certain employees who qualify for the Clergy Residence Deduction (CRD).
Since 2005, CRA’s previous position was that the T1213 form was no longer required for any CRD eligible employee who informed their employer, via the annual CRA form T1223 Clergy Residence Deduction, that they would be making a CRD claim.
Now, employees who own or rent their accommodation will again be required to file form T1213 with CRA, and receive written approval from CRA, before being allowed a reduction of income tax at source.
When housing is provided by the employer (e.g. a manse or parsonage), the T1213 filing is not required because the provided-housing taxable benefit will generally equal the CRD amount.
CCCC suggests that a T1213 form should be filed by October or early November of a current year to allow sufficient time for CRA to issue an approval for the following year.
CCCC discovered that CRA had amended its policy (2005 Charties Newsletter No. 23), but had not indicated that a change had been made. When notified by CCCC, the omission was corrected.
In the future, whenever an old edition of a CRA newsletter has been modified, a “What’s New” notification will be sent out to highlight the amendment or modification. The CRA webpage will also indicate a “last updated” or “date modified” to inform the reader that changes have been made to the original document.
