TD1 Tax Form: Personal Tax Credits Return in Canada

What is the TD1 Tax Form?

The TD1 Tax Form, or Personal Tax Credits Return, is used to calculate the amount of income tax that will be deducted or withheld by your employer or from your pension income. It takes into account your nonrefundable tax credits and deductions you may be able to claim, both federally and provincially.

This can be important information for the Canada Revenue Agency (CRA) to know, as it can minimize the taxes you owe at the end of the year. Or, if you normally get a refund and would rather receive those funds throughout the year instead of in a lump sum, what you record on your TD1 can make that happen.

To update your TD1 Form, your employer can either provide you with a paper copy and have you fill it out and return it. Or you could access it through the CRA website. A larger employer may provide an electronic version, while a smaller company would most likely use a paper or online PDF version. Both would include instructions on how to complete and return the form electronically.

Who should fill out the TD1 Tax Form?

If you have an employer, you should have filled out the TD1 when you started work. Since TD1 Forms are most often used when an employee starts working for a company. If you have multiple employers taking taxes out of your income, be sure to fill out one form for each. There is an option to check on the backside of the form if this is the case in order to avoid both employers factoring in the same nonrefundable tax credits. Pensioners also fill out the TD1 Form when they begin receiving benefits.

Employees who want to claim more than the basic personal amount (or exemption) must complete both the federal and provincial TD1 Forms. Same with pensioners who claim more than the basic personal exemption; they must fill out both forms.

There are also changes that might necessitate you filling out a new TD1 Form. Note: You have only 7 days after the change to submit a new form to your employer. If your employer does not have a TD1 Form for you, the employer will make deductions allowing for only the basic personal amount.

See below for some circumstances in which you would fill out a new TD1 Form:

1. You have a change in your personal situation that prompts you to rethink the amounts you previously claimed—for example:
   • You have a change in marital status.
   • You have a spouse or eligible dependant you are now supporting.
   • You are eligible for the disability tax credit (DTC).
   • You started post-secondary school.
   • You turned 65.
2. You want to claim the Northern Residents Deduction for living in a prescribed zone (prescribed northern zone or prescribed intermediate zone).
3. You want to increase the amount of tax deducted from your paycheque, so you don’t have to pay as much tax when you file your tax return.
4. You want to decrease the amount of tax deducted from your paycheque. Along with the TD1, you will also need to fill out Form T1213 – Request to Reduce Tax Deductions at Source.

You don’t have to complete the TD1 Form every year; rather, only when your situation changes.

Are there other special forms to fill out in addition to the TD1?

Depending on your circumstances, there are other forms required to change your tax withholdings, along with the TD1:

• If you get paid by commission and, because of your expenses, want less income tax deducted during the year, you’ll also need to complete the TD1X – Statement of Commission Income and Expenses for Payroll Tax Deductions Form.
• If you are a commission employee working in Québec, use the Federal TD1X Form and the Provincial Form TP1015.R.13.1-V, Statement of Commissions and Expenses for Source Deduction Purposes.
• If you are a self-employed fisher and you want your designated employer to deduct 20% tax at the source on your catch, use Form TD3F, Fisher’s Election to Have Tax Deducted at Source.
• Status Indians who want to know if their income is taxable should complete Form TD1-IN Determination of Exemption of a Status Indian’s Employment Income.

After you complete the forms, you must give them to your employer or payer, who should keep the completed forms with their records.

How do I fill out a TD1 Form?

It’s not hard to fill out a TD1 Form. But you may have to complete two—the federal form and the provincial/territorial form. Just follow the instructions on each line of the forms.

Then, add together the amounts from each line. On the Federal TD1, you must add lines 1–12 together, and then enter the total amount on line 13. On the provincial/territorial form, it will vary depending on where you live.

The sum should be entered on the last line on page 1 of the form (“Total Claim Amount”). This number will determine the amount of tax deducted per pay period from your gross pay.

You can find the provincial/territorial forms and worksheets here.

Remember to complete one set of forms for each employer or pension plan administrator.