Year End Planning: Reduce OAS Clawback with T1213 (OAS)

Cash-strapped seniors suffering from prolonged poor investment results will want to ensure that cash flow is supplemented from guaranteed sources like the Old Age Security. If a clawback based on prior year income levels is part of the equation, advisors can help by applying for a reduction in this recovery tax using a newly updated form T1213.

Here's how it works:

1. Estimate income from all sources

2. Take deductions including investment carrying charges and interest expenses

3. Take non-refundable tax credits into account including the disability amount and eligible medical expenses and charitable donations, and

4. Provide information about tax deducted at source and paid through instalments

If the result warrants a reduction of the OAS recovery tax, the senior will be provided a higher monthly income from this source.