Form TD1, personal tax credit return, is used by the employer to determine the amount of income tax to be deducted from the income of an employee.
Two types of Form TD1
There are two types of Form TD1 – federal and provincial or territorial. An employee must complete a federal Form TD1 and, if more than the basic personal amount is claimed, a provincial or territorial Form TD1 (Form TP-1015.R.13.1 in Quebec).
When to complete Form TD1
An employee must file Form TD1 with the employer when the employee commences employment with that employer. The employee should file a new Form TD1 within 7 days of any change that may reasonably be expected to result in a change to their personal tax credit for the year.
Penalty if not file Form TD1
Employees who do not complete new TD1 forms may be subject to a penalty of $25 for each day the form is late. The minimum penalty is $100, which is increased by $25 per day to the maximum of $2,500.