Are you aware of and meeting all your tax obligations for new employees, or staff whose exemption status changes? Don't let these steps slip through the cracks.
This form allows for additional exemptions to be claimed which results in lower income taxes being deducted when a child is added to the family, a person becomes 65 no later than December 31, a person starts receiving pensions other than Canada Pension, Quebec Pension, old age security, a person becomes a student enrolled in a university, etc. It used to be that the deductions were the same for the Federal Government and the Provincial Government, but this is no longer the case.
When an employee is hired, or when there is a change to an employee's personal tax credits, an employee should complete both a Federal and a Provincial Personal Tax Credit return and provide a fully completed copy to the employer. In the event an employer does not receive these forms, the employer must then apply the basic exemption when calculating income tax deductions for payroll purposes.
Yes. It is the employer's responsibility to ensure that the TD1 has been filled in correctly and that any amounts claimed over the basic personal amount by the employee are reasonable.
Here's a checklist of items to check for:
- make sure the employee has used the correct amounts as specified on the form
- the amount(s) being claimed has been added up correctly
- the form does not claim any obvious false information
- the social insurance number is correct
- Natasha Smyth, B.SC.(Agr.), CPM