Everything You Should Know About TD1 Forms
We know TD1 forms as the paper you’re handed when you start a new job and it’s more than likely you’ve filled a few out in your time. This form is used by the government to determine the amount of tax to be deducted from your employment income or another income (like a pension). There are two types of TD1 forms, federal and provincial/territorial forms. Both of these can be found on the CRA site.
Who needs to complete the form?
You’ll need to complete a TD1 form if you:
- Just started a new job
- Want to change amounts previously claimed
- Claim deductions for living in a prescribed zone
- Want to increase the amount of taxes deducted at source
Help! What does it mean? Deducted at source means deductions that are withheld from your income (ex. employment income/pension income.)
Do I complete a new TD1 form every year?
The short answer: Nope!
You don’t have to worry about submitting a new form every year. The only reason you’d have to is if you’d like to change your personal tax credit amounts. If you decide to fill out a new form, make sure the changes are made no later than seven days after the change is submitted.
Now, to answer some common questions about TD1 forms
What if I changed jobs in a given calendar year?
Let’s start with the Basic Personal Amount on line one. Make sure you don’t claim it on the TD1 for your next employer since this is already claimed by your old one. This is assuming that you made more than the amount of the basic personal exemption in that year and you worked at your old job long enough that if it was claimed again, you would not have enough taxes withheld at source. The last thing you want is to be on the hook to pay taxes because not enough was withheld.
If you’re someone who only works in the holiday season, you might make less than the basic personal amount. However, since what you earn per week leads to a higher annual income amount, you will have taxes deducted. Otherwise, you shouldn’t have any income taxes withheld, but there would still be CPP and EI.
What happens if I have two jobs at once?
If you find yourself in this situation, pick one employer to claim the basic personal exemption for you. Make sure you put a zero on the line for the TD1 for your second employer. We recommend that you apply the basic personal exemption to the employer with a higher annual income.
Tip: Don’t forget to tick the box on page 2 that says you have more than one employer at the same time
What if I make less than the basic personal exemption in the year?
On page 2, there’s a box stating that your total income for the year from all employers is less than the basic personal exemption. If you check off this box, no income taxes are withheld from your income.
How do I withhold additional taxes from my wages?
We’re looking at page 2 again! Write down the dollar total that you would like to have deducted. Remember, it can’t be a percent of your earnings.