Employers - Are You Ready For 2010?

It's time to start your tax planning for NEXT year! Employers should ensure they include a copy of the new TD1 forms to all employees with their year end pay cheques in order that the correct source deductions are deducted for 2010.

Form TD1, Personal Tax Credits Return, is completed by employees and provided to their employers. The forms are used by the employer to determine the amount of federal and provincial or territorial tax that is to be deducted or withheld from the employee's employment income. Employees will normally complete a Federal TD1 plus a TD1 for the province or territory of employment.

The Federal TD1 has been revised to include the increased non-refundable tax credits available to taxpayers at the end of the year. The basic personal amount and spousal amount have now been increased to $10,382 and the amount that may be claimed for every child born in 1993 or later will be $2,101. For a link to the CRA website and the updated Federal and Provincial TD1's click here.

Form T1213 is to be completed by taxpayers when requesting reduced tax deductions at source for deductions or non-refundable tax credits that don't appear on Form TD1, Personal Tax Credits Return.

For example, if there are registered retirement savings plan (RRSP) contributions being made outside of contributions made through your employer or there are support payments made and tax deductions at source should be lowered due to these deductions, it is appropriate for a taxpayer to use Form T1213 to request reduced tax deductions at source for the tax year.

For a copy of Form T1213, click here.

For more tax tips, purchase a copy of Essential Tax Facts written by The Knowledge Bureau's President, Evelyn Jacks, to learn how to ace your 2009 tax return and save money all year long.