Completing a Personal Tax Credits Return (TD1) - Segment 4

Transcript

Host: Welcome to the segment called Completing a Personal Tax Credits Return (TD1), part of the Canadian Students and Income Tax video.

With me is Frank Stewart. Welcome Frank.

Subject matter expert: Thank you Janice,

Host: What exactly is a TD1?

Subject matter expert: Form TD1, Personal Tax Credits Return is used to figure out the amount of tax to deduct from an individual's employment income or other income, such as pension income.

Host: What is the purpose of a TD1?

Subject matter expert: A TD1 outlines the non-refundable tax credits that an individual can claim on their Income tax and benefit return. It also allows the employer to calculate the correct amount of income tax to deduct based on the employee's federal and provincial or territorial personal claim code.

Host: So who has to complete this form?

Subject matter expert: Individuals who have a new employer or payer have to complete the federal TD1 and, if you claim more than the basic personal amount, you also have to complete the provincial or territorial TD1.

Host: Do I have to fill out a new TD1 every year?

Subject matter expert: No, individuals do not have to fill out a new TD1 every year unless there is a change in their entitlements to their federal, provincial or territorial personal tax credit amounts. If there is a change, you have to fill out a new form no later than seven days after the change.

Host: Do I attach the completed TD1 to my income tax and benefit return when I file it?

Subject matter expert: No. Once you sign a TD1, the employer or payer keeps it on file. The completed, signed form is considered to be a filed return.

Host: Is there one common TD1 form for all of Canada?

Subject matter expert: No, there are federal TD1s and provincial or territorial TD1s.

For more information go to the CRA's webpage Form TD1, Personal Tax Credits Return.

Individuals in Quebec should use the federal TD1 and provincial form, Source Deductions Return.

The links are included in the Related links for this segment.

Host: How do I know which one to use?

Subject matter expert: Employees who claim more than the basic personal amounts have to fill out the TD1 that corresponds to their province or territory of employment.

To determine which is the province or territory of employment, go to the CRA webpage on that topic. The link is included in the Related links for this segment.

Host: What if I have more than one employer, do I have to fill out a TD1 for each of them?

Subject matter expert: Yes you do Janice. But you can only claim the basic personal amount on one of the TD1's.

In other words, if you have already filled out a TD1 with one employer or payer and claimed the basic personal amount, you cannot claim it again with the second employer.

Host: How does that work in terms of calculating my personal tax credits when I have two or more employers?

Subject matter expert: Okay, let's say you add up your total income from all sources and it's going to be more than the basic personal amount you claimed on the TD1 you filled out with your first employer or payer.

If that's the case, you have to check the box on the back of Form TD1 you complete with your second and subsequent employers or payers and enter zero on line 13 on the front of the form.

In this case, you would not complete lines 2 to 12.

Host: If I don't fill out a TD1, does that mean my employer won't deduct any taxes from my pay?

Subject matter expert: If you don't fill out these forms, your employer or payer is still responsible for deducting taxes but will calculate your deductions allowing only the basic personal amount.

Host: Okay. What if I find that I owe tax when I file my return and I want my employer to deduct more from my pay throughout the year to try and reduce the tax I'll have to pay the following year? Can my employer deduct extra tax?

Subject matter expert: Yes. An employer can deduct extra tax at the request of an employee. You need to fill out and sign federal Form TD1 and indicate on the form how much more tax you want your employer to withhold.

You indicate the amount in the section called Additional tax to be deducted on page 2 of the Form TD1. The employer will add that amount to the income tax amount they normally withhold.

The additional tax will continue to be deducted until you file a new TD1.

Host: How does a person paid by commission file a TD1?

Subject matter expert: Individuals paid by commissions and who claim expenses can choose to use the TD1X, Statement of Commission Income and Expenses for Payroll Tax Deductions, to take expenses into consideration in calculating their income tax.

Employees working in the province of Quebec have to file the federal TD1X and a provincial form called Statement of Commissions and Expenses for Source Deduction Purposes.

To get federal and provincial TD1 and TD1X forms, go to the CRA webpages on those topics.

The links are included in the Related links for this segment.

Host: That was very helpful. Thank you Frank.

This concludes the segment called Completing a Personal Tax Credits Return (TD1), part of the CRA's Canadian Students and Income Tax video. Thank you for watching.

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: