The New Year has come again and that means a new payroll year has come as well. It is time for your staff to fill out new TD1 forms.
While employees are not required to submit new forms yearly, this is best practice because not only do most employees forget to complete the form when their tax situation has changed, but completing the form allows tax deductions to be reduced if the employee is eligible for tax credits other than basic personal exemption (more money in their pockets now).
In BC, any employees that you have who are students can report their tuition, education, and textbook amounts to claim to reduce their tax deduction.
Circumstances when these forms need to be filled out or updated:
- All new staff members are required to fill out TD1 forms (provincial & federal)
- If an employee gets married or divorced (includes uniting with or splitting up with a common-law spouse/partner)
- Turning age 65
- Becoming eligible for the disability tax credit (doctor or nurse practitioner certification required)
- Staff members who return to school or complete their education
- Staff members who take a second job
What if employees don’t fill out a TD1?
The CRA maintains the option of issuing fines to employees who do not submit new TD1 forms when required. The penalty is $25.00 per day for each day the form is late, with a minimum fine of $100.00 and a maximum fine of $2500.00. More information can be found at this link:
Where do we find TD1 forms?
At the link below. Both provincial and federal, with worksheets if things get complicated!
This has been a gentle reminder from the beancounters at Odds & Evens Bookkeeping, wishing you and your staff a Happy New Year!