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How to Fill Out the TD1 and TD1ON Forms in Ontario

When you start a new job in Canada, your employer will usually ask you to complete two tax forms: the TD1 Personal Tax Credits Return and the TD1ON Ontario Personal Tax Credits Return.

These forms help your employer calculate how much income tax to deduct from your paycheque. They are not tax returns, and you do not send them directly to the CRA. Instead, you complete them and give them to your employer or payroll department.

For employees working in Ontario, the two most common forms are:

  • Federal TD1 form: used to calculate federal income tax deductions.
  • Ontario TD1ON form: used to calculate Ontario provincial income tax deductions.

The CRA provides the current federal TD1 form and Ontario TD1ON form online. Employers can give employees the official CRA webpage link or paper copies, and completed forms can be submitted electronically or on paper.

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Official CRA Links

You can access the official CRA forms here:

When Do You Need to Fill Out a TD1?

You generally need to complete a TD1 form when:

  • You start a new job.
  • You want to change the personal tax credit amounts you previously claimed.
  • Your personal situation changes and affects your tax credits.
  • You want your employer to deduct extra income tax from your pay.

Employers must get completed TD1 forms when an employee starts work or when the employee wants to increase the amount of income tax deducted from their pay. You do not usually need to complete a new TD1 every year unless your personal tax credit amounts change.

What Is the TD1 Form Used For?

The TD1 tells your employer how much of your income may be covered by personal tax credits. These credits reduce the amount of tax that should be deducted from your pay during the year.

Common amounts on the TD1 may include:

  • Basic personal amount
  • Age amount
  • Pension income amount
  • Tuition amount
  • Disability amount
  • Spouse or common-law partner amount
  • Amount for eligible dependants
  • Canada caregiver amounts

Most employees only claim the basic personal amount, unless they qualify for additional credits.

What Is the TD1ON Form Used For?

The TD1ON is the Ontario version of the TD1. It helps your employer calculate the Ontario provincial tax to deduct from your pay.

If you work in Ontario and are only claiming the basic personal amount, your payroll may be straightforward. However, if you are claiming additional Ontario credits, you should complete the TD1ON carefully.

The Ontario form includes provincial tax credit amounts, which may be different from the federal TD1 amounts.

Step-by-Step: How to Fill Out the Federal TD1

Step 1: Enter your personal information

At the top of the form, enter:

  • Your full legal name
  • Date of birth
  • Address
  • Social Insurance Number
  • Employee number, if applicable

Make sure your SIN and name match your payroll records.

Step 2: Review each tax credit line

The TD1 includes different lines for personal tax credit amounts. Some people only need the basic personal amount, while others may qualify for additional amounts.

Do not claim a credit unless you are reasonably sure you qualify.

Step 3: Add the amounts you are claiming

If you only qualify for the basic personal amount, you will usually enter the basic amount and leave the other lines blank.

If you qualify for other credits, enter the applicable amounts and add everything together.

Step 4: Enter the total claim amount

At the end of the calculation section, enter your total claim amount. This is the amount your employer will use to calculate federal income tax deductions.

Step 5: Complete the second page, if applicable

The second page includes important sections for special situations, such as:

  • More than one employer or payer at the same time
  • Total income expected to be less than your total claim amount
  • Additional tax to be deducted

Read these sections carefully before signing.

Step 6: Sign and date the form

Once complete, sign and date the form and give it to your employer. Employers keep the form in their records and do not send it to the CRA.

Step-by-Step: How to Fill Out the TD1ON

The Ontario TD1ON is completed in a similar way to the federal TD1.

Step 1: Enter your personal information

Include your name, date of birth, address, SIN, and employee number if applicable.

Step 2: Review Ontario tax credit amounts

The Ontario form includes provincial credits, which may be different from the federal credits.

Common Ontario amounts may include:

  • Ontario basic personal amount
  • Age amount
  • Pension income amount
  • Tuition and education amounts, where applicable
  • Disability amount
  • Spouse or common-law partner amount
  • Amount for an eligible dependant
  • Caregiver amounts

Step 3: Claim only what applies to you

If you are not sure whether you qualify for a credit, review the CRA instructions or ask a tax professional before claiming it.

Step 4: Add the Ontario amounts

Add all applicable Ontario credit amounts and enter the total claim amount.

Step 5: Sign and date the form

Give the signed TD1ON to your employer or payroll department.

Example 1: Employee With One Job and No Extra Credits

Maria starts a new full-time job in Ontario. She is single, has no dependants, is not a student, and does not qualify for additional credits.

She would generally:

  • Complete the federal TD1.
  • Complete the Ontario TD1ON.
  • Claim only the basic personal amount on each form.
  • Sign and give both forms to her employer.

This is the most common situation for many employees.

Example 2: Employee With Two Jobs

David works two jobs at the same time. He already claimed the basic personal amount on the TD1 forms for his first employer.

For his second employer, he should generally not claim the same personal credits again. If he claims the basic personal amount on both forms, both employers may reduce his payroll tax deductions, which could result in not enough tax being deducted during the year.

In this situation, David may need to check the section for more than one employer or payer at the same time and enter 0 as the total claim amount for the second employer.

Example 3: Employee Wants More Tax Deducted

Ana has other income outside her job and wants to avoid owing tax when she files her personal tax return.

She can complete the Additional tax to be deducted section on the TD1 and ask her employer to deduct an extra amount from each paycheque.

For example, she may ask for an extra $50 per paycheque to be deducted.

This does not reduce her total tax for the year, but it can help reduce a balance owing at tax time.

Example 4: Student With Tuition

Carlos is a student working part-time and expects to pay eligible tuition during the year.

He may be able to claim a tuition amount on his TD1, depending on his situation. If he claims tuition on the TD1, his employer may deduct less tax from his pay.

However, he should only claim amounts he reasonably expects to be eligible for. If he claims too much, he may have less tax deducted during the year and could owe money when he files his tax return.

Example 5: Employee Whose Income Will Be Very Low

Sofia starts a part-time job and expects her total income for the year to be less than the total claim amount on her TD1.

In this case, she may be able to complete the section stating that her total income will be less than her total claim amount. If applicable, this may result in no income tax being deducted from her pay.

However, she should be careful. If her income later increases, or if she has another job or other income, she may need to update her TD1 to avoid owing tax at the end of the year.

Common Mistakes to Avoid

Claiming the basic personal amount twice

If you have more than one employer, be careful not to claim the same credits on both TD1 forms.

Leaving the form unsigned

An unsigned form may not be valid for payroll purposes.

Claiming credits you do not qualify for

Only claim amounts that apply to your situation.

Not updating the form after a major change

You should update your TD1 if your personal tax credit amounts change. This could happen if you start or stop having multiple jobs, become eligible for a new credit, or no longer qualify for a credit.

Thinking the TD1 is your tax return

The TD1 is not the same as your personal income tax return. It only helps your employer estimate payroll tax deductions.

What Happens If You Do Not Give Your Employer a TD1?

If an employee does not provide the required TD1 form, the employer still has to calculate and remit payroll deductions. In this case, the employer will generally calculate deductions using only the basic personal amount.

To avoid payroll issues, it is best to complete the forms when your employer asks for them.

Do You Send the TD1 to the CRA?

No. You give the TD1 and TD1ON to your employer. Your employer keeps the forms with your payroll records.

The completed TD1 forms are generally not sent to the CRA, but employers should keep them on file in case they are needed later.

Final Tips

Before submitting your TD1 and TD1ON:

  • Use the most current year’s forms.
  • Make sure your name and SIN are correct.
  • Claim only the credits that apply to you.
  • Be careful if you have more than one job.
  • Sign and date both forms.
  • Keep a copy for your records.

Completing your TD1 and TD1ON correctly helps your employer deduct a more accurate amount of tax from your paycheque. If the forms are completed incorrectly, you may have too much tax deducted during the year or not enough tax deducted, which could lead to a balance owing when you file your tax return.

Need Help Completing Your TD1 or TD1ON?

If you are unsure how to complete your TD1 or TD1ON, Toro Accounting can help you review your situation and understand what should be claimed.

You can book a free consultation with Toro Accounting here:

https://calendly.com/d/cvs3-qq3-ymk/free-consultation-w-toro-accounting