Don't you have a ton of federal tuition/provincial tuition carryforwards that you can put on your TD1 so your employer will withhold almost no tax anyway?
The answer is "probably not".
In this post, "ITA" refers to the Income Tax Act
, RSC 1985, c 1 (5th Supp). "Reg" refers to the Income Tax Regulations
, CRC, c 945.
ITA § 153(1)(a) provides in relevant part that any person paying wages to any other person "shall deduct or withhold from the payment the amount determined in accordance with prescribed rules".
ITA § 221(1)(a) provides that the Governor in Council may may regulations "prescribing anything that, by this Act, is to be prescribed".
Reg § 107(2) provides that an employee may "elect to file a prescribed form for the year". Cryptically, the provision does not say what the form contains or what it is for.
Reg § 102(2) provides that when an employee files the prescribed form alluded to in Reg § 107(2), then the employer shall compute the employee's "estimated annual taxable income" for withholding purposes by subtracting the "the amount of that employee’s expenses in respect of the year as recorded by that employee on that form". The regulation does not say or limit what kind of expenses can be claimed on the form, but it the form does need to be the "prescribed form".
As far I can tell, no legal instrument actually tells us what this mysterious "prescribed form" is, but it's probably intended to be Form TD1
. Form TD1 does not appear to contain anywhere to claim carry forward education amounts. Section 5 of Form TD1 instructs the reader to enter an amount computed based on the present year only. Modifying the form to include carry forward amounts would probably cause it not to be the "prescribed form" anymore, meaning it would not reduce the amount of tax withheld from your wages.
Including the carry forward amounts in Form TD1 might also be a criminal offense contrary to ITA § 239(1)(a), which provides that anybody who has "made, or participated in, assented to or acquiesced in the making of, false or deceptive statements in a return, certificate, statement or answer filed or made as required by or under this Act or a regulation" is guilty of a criminal offense. However, the document contemplated by Reg § 107(2) is referred to as a "prescribed form", not a "return", "certificate", "statement", or "answer", so it's arguable whether this criminal offense applies.
The main weakness in the limitations of Form TD1 is that Form TD1 may not be authorised by law. There does not appear to be any instrument that says that Form TD1 is the "prescribed form" contemplated by Reg § 107(2). A related issue is that the general rule in administrative law is that a person authorised to make regulations must be the person who makes the regulations; he cannot further delegate that power. ITA § 221(1)(a) authorises the Governor in Council to make regulations; it does not authorise the CRA to do so. Parliament was aware of this principle of law, so it enacted ITA § 221(4) which provides that a regulation made by the Governor in Council may "incorporate by reference material as amended from time to time". This is arguably exactly what Reg § 107(2) does.