How to Fill Out the TD1 Personal Tax Credits Return (2026)

The TD1 tax form — the Personal Tax Credits Return — tells your employer how much income tax to hold back from every paycheque. For 2026, most employees claim the $16,452 basic personal amount on line 1 and stop there, but the other lines, the multiple-employer box and the provincial form are where the expensive mistakes happen.

The TD1 is not a tax return and it never reaches the Canada Revenue Agency. It is an instruction to your employer or pension payer: here are the personal tax credits I expect to claim this year, so withhold tax as if I will get them. The total on line 13 becomes a "claim code" in your employer's payroll software, and that code sets how much federal tax comes off each pay.

The stakes are simple. Claim too little and you overpay all year, lending the government money at zero interest until your refund arrives the following spring. Claim too much — most often by claiming the basic personal amount on two forms at once — and you underpay all year, then meet a balance owing in April with interest running from May.

There are two forms for most employees: the federal TD1 and a provincial or territorial version for the province where you work — TD1ON for Ontario, TD1BC for British Columbia, TD1AB for Alberta, and so on. Quebec is the exception: federal tax is still set by the TD1, but provincial withholding uses Revenu Québec's own source-deductions form rather than a TD1 variant.

The form itself is two pages. Page 1 is thirteen numbered lines of credits that add up to your total claim amount. Page 2 holds the boxes that override everything on page 1: more than one employer, total income below your claim, non-resident status, and a request to have extra tax deducted. Most people are handed the form on their first day, fill in line 1 from the pre-printed figure, sign it and never look at it again. That is fine for a single job with no dependants and no pension; for everyone else, ten minutes on the remaining lines is worth real money.

The CRA's instruction on the 2026 form is specific. Fill out a TD1 when you start with a new employer or payer and will receive salary, wages, commissions, a pension, employment insurance benefits or any other remuneration; when you want to change the amounts you previously claimed; when you want to claim the deduction for living in a prescribed northern zone; or when you want more tax deducted at source. Sign and date it, and give it to your employer — never to the CRA.

A new form is not required every January if nothing has changed. Employers are allowed to carry forward your existing claim and apply the indexed amounts each year, which is why a TD1 you signed years ago may still be governing your paycheque today. That convenience cuts both ways: a spouse who returned to work, a child who turned 18, or a pension that started all change your entitlement, and none of them updates the form on your behalf.

When your situation changes in a way that could reasonably change your credits, you are expected to give your employer a new TD1 within seven days. The rule has teeth: an employee who fails to provide a required form can be penalised $25 for each day it is late, with a minimum of $100 and a maximum of $2,500. In practice the CRA rarely pursues this against employees, but the exposure is real, and the more common cost is the underpayment the stale form produces.

Employers who never received a TD1 are told to withhold using only the basic personal amount. That is a safe default for the government and an expensive one for anyone entitled to more — a single parent claiming the eligible dependant amount, or a retiree with pension income and the age amount, can lose hundreds of dollars a month to withholding that a ten-minute form would have prevented. Our tax refund guide explains why a large refund is usually a TD1 problem, not a windfall.

Line 1 is pre-printed with the federal basic personal amount, and for 2026 that figure is $16,452. Every resident employee is entitled to it, which is why the form's own instruction is that most people simply confirm the figure and move on. It represents the slice of income the federal government taxes at zero, delivered as a credit against the tax on your pay.

Higher earners do not get the whole amount. For 2026 the basic personal amount begins to reduce once net income passes $181,440, phasing down on a straight line until it reaches $14,829 at net income of $258,482 or more. If you expect to be in that range, the form directs you to the TD1-WS worksheet to calculate a partial amount; claiming the full $16,452 when you are entitled to $14,829 leaves roughly $240 of tax under-withheld across the year — small, but it is the kind of gap that compounds with the others below.

The line is also where the biggest single TD1 error lives. The basic personal amount is a per-person credit, not a per-job credit. If you hold two jobs at the same time and claim $16,452 on both TD1 forms, both employers withhold as if your first $16,452 of income were tax-free, and you will have paid roughly $2,400 too little federal tax by December (at the 15% rate the credit is worth), before the provincial equivalent. Page 2 has a box for exactly this situation, covered below.

One more point of confusion: line 1 is a federal figure, and it changes every year with indexation. The provincial form has its own basic personal amount that can be far higher or lower — Alberta's is $22,769 for 2026, Ontario's $12,989 — so the number on your TD1ON or TD1AB will never match the federal one, and that is correct, not an error.

These five lines add credits for circumstances the payroll system cannot know about unless you declare them. Each one you skip is tax over-withheld every pay period until the following April.

Line 2 — Canada caregiver amount for infirm children under 18. $2,740 for each infirm dependent child born in 2009 or later who lives with both parents throughout the year. Where the parents live apart and the child is claimed as an eligible dependant, this amount goes on line 8 instead.

Line 3 — Age amount. If you will be 65 or older on 31 December 2026 and your net income for the year will be $46,432 or less, enter $9,208. Between $46,432 and $107,819 a partial amount applies, calculated on the TD1-WS worksheet. Above that, nothing.

Line 4 — Pension income amount. If you receive regular payments from a pension plan or fund, enter the lesser of $2,000 or your expected annual pension income. Canada Pension Plan, Quebec Pension Plan, Old Age Security and Guaranteed Income Supplement payments do not qualify — this is for employer and registered pension income.

Line 5 — Tuition. A student paying more than $100 in fees to a single institution in 2026 enters the total tuition to be paid for the year. This is the one line where an employee who is also a student can reduce withholding on a part-time job dramatically, because a full year of tuition can exceed the income itself.

Line 6 — Disability amount. Enter $10,341 if you will claim the disability tax credit on your return using an approved Form T2201. Without the approved certificate on file with the CRA, the credit cannot be claimed at all, so do not enter this line in anticipation.

For the retiree and the student, lines 3 to 5 together can move thousands of dollars of income into the zero-tax band at the payroll stage rather than at refund time. For a professional with a disability certificate, line 6 does the same. None of them is exotic; all of them are routinely left blank.

The second group covers the people you support. The amounts here are calculated rather than fixed, so the worksheet matters.

Line 7 — Spouse or common-law partner amount. If you support a spouse or partner who lives with you, enter the difference between the line 1 basic personal amount and their expected net income for the year; if they are infirm, add $2,740. A spouse earning $6,000 in 2026 produces a line 7 claim of $10,452. A spouse earning more than the basic personal amount produces nothing. Where the spouse is infirm with net income of $29,374 or less, line 9 may apply instead.

Line 8 — Amount for an eligible dependant. The single-parent equivalent of line 7: for someone with no spouse who supports a dependant relative living with them, the same calculation — line 1 minus the dependant's net income, plus $2,740 if infirm. Only one eligible dependant can be claimed per household.

Line 9 — Canada caregiver amount for an infirm spouse or eligible dependant. Where the person on line 7 or 8 is infirm and has net income of $29,374 or less, the worksheet calculates a further amount here.

Line 10 — Canada caregiver amount for dependants aged 18 or older. $8,773 for each infirm adult dependant — a parent, grandparent, adult child, sibling — whose net income is $20,601 or less, with a partial amount between $20,601 and $29,374. The amount can be shared between caregivers and claimed for more than one dependant.

Lines 11 and 12 — Amounts transferred. Unused age, pension income, tuition or disability amounts your spouse cannot use go on line 11; unused disability amounts from dependants and unused tuition from dependent children or grandchildren go on line 12. Line 13 totals everything.

Families supporting an aging parent are the group most often under-claiming here. Line 10 alone is worth about $1,300 of federal tax at the 15% credit rate, and it is claimable on the TD1 from the first pay period rather than reclaimed twelve months later. It is also exactly the kind of household arithmetic our tax planning engagements start with, because the same facts drive the return in April.

Page 1 adds up your credits. Page 2 decides whether they apply at all, and it is the half of the form that people skip because it looks like fine print.

More than one employer or payer at the same time. If you have already claimed personal tax credit amounts on another TD1 for 2026 — with another employer, or with a pension payer — you cannot claim them again. If your total income from all sources will exceed the credits you claimed on that other form, tick this box, enter "0" on line 13, and leave lines 2 to 12 blank. This second employer then withholds tax from the first dollar, which is exactly right: your credits are already being used against your other income.

Total income less than total claim amount. If your total 2026 income from every employer and payer will be less than your total claim on line 13, tick this box and no tax will be deducted from your pay at all. This is the student's box and the part-time earner's box — but it is a declaration about the whole year, so a summer job that becomes a full-time job in September needs a new form.

Non-residents. A non-resident of Canada is entitled to the personal credits only if 90% or more of their world income for the year will be included in determining their Canadian taxable income. Anyone answering no enters "0" on line 13 and claims nothing.

Additional tax to be deducted. Below those boxes is a line for an extra dollar amount to be withheld from each payment. It exists for people with income that carries no withholding — CPP and OAS payments, investment income, a side business — who would rather pre-pay through payroll than face a balance in April. You can file a new TD1 to change or remove it at any time.

Your employer needs two forms because two governments tax your pay. The provincial or territorial TD1 is chosen by where you work, not where you live — an employee who lives in Gatineau and works in Ottawa fills out the federal TD1 and the Ontario TD1ON. Each provincial form mirrors the federal structure with its own figures, and the figures differ far more than most people expect.

Alberta's basic personal amount is nearly double Ontario's, which is why the same salary produces a noticeably different net pay in Calgary and Toronto before any rate difference is counted. Ontario and BC also define the spouse and eligible dependant amounts differently from the federal form — a fixed figure with a low income threshold rather than a subtraction from line 1 — so a spouse with modest income can qualify federally and not provincially.

The provincial forms carry the same page-2 boxes as the federal one, and the same trap: tick "more than one employer" on the federal TD1 and forget the TD1ON, and Ontario tax is still under-withheld all year. Employers with staff in several provinces — construction crews, transport operators, multi-location restaurant groups — have to hold the right provincial form for each employee's actual province of employment, and change it when a transfer happens.

The TD1 was designed around one employer paying one salary. Every departure from that picture needs a deliberate choice, because each payer calculates withholding as if it were your only income.

Two jobs at once. Give your main employer the full TD1 with your credits. Give the second employer a TD1 with the "more than one employer" box ticked and "0" on line 13. The second job is then taxed from the first dollar — at the lowest bracket rate the payroll tables apply, which may still be below your true marginal rate. If the second income is substantial, add an amount on the additional-tax line as well.

A pension and a job. The same rule applies: a pension payer and an employer are both "payers", and the basic personal amount goes to one of them. Retirees who take a part-time job routinely claim it twice and then owe in April, having also collected CPP and OAS with no withholding at all. The additional-tax box on the employment TD1 is the clean fix for the CPP and OAS portion.

Employment plus self-employment. Business income has no payer to withhold anything, so a salaried employee with a side business either pays instalments or over-withholds through the job. Requesting additional tax on the TD1 is simpler than quarterly instalments and avoids instalment interest — provided the figure is reviewed each year as the business grows.

Working spouses. Each spouse files their own TD1; credits are not pooled. The spouse amount on line 7 belongs on the higher earner's form only when the other's income will be low enough to qualify, and it should come off the form the year that changes. Getting these choices right is payroll hygiene, and for an incorporated owner paying themselves a salary it is also a payroll compliance question, because the corporation is the employer holding the form.

The TD1 lists credits, not deductions. Large recurring deductions — RRSP contributions you make yourself, child care expenses, support payments, employment expenses, carried-forward tuition, sizeable charitable donations — reduce your tax in April but appear nowhere on the form, so your employer withholds as if they did not exist. For someone contributing heavily to an RRSP, that can mean thousands of dollars refunded each spring that could have stayed in the paycheque.

The mechanism for that is Form T1213, Request to Reduce Tax Deductions at Source. You file it with the CRA — not your employer — listing the deductions and credits you expect, and if approved the CRA issues a letter of authority telling your employer how much to reduce withholding by for the year. The employer cannot act on the T1213 itself; only the letter changes the payroll calculation, and it has to be renewed each year. One exception the form itself notes: if your employer deducts your RRSP contributions from salary and remits them, no letter is needed — payroll already accounts for them.

The opposite lever is the additional-tax line on page 2 of the TD1. Anyone with untaxed income — CPP, OAS, rental income, investment income, a side business — can have a fixed extra amount withheld from each pay. It costs nothing, needs no CRA approval, and can be changed with a new TD1 whenever the picture changes. Used together, the T1213 and the additional-tax box let you aim your withholding at the tax you will actually owe rather than at the default the payroll tables assume.

A quick way to see whether you are on target is to run your expected income through our personal income tax calculator and compare the result to the tax already shown on your pay stubs; a gap either way tells you which form to file.

The employer's obligations are administrative but they carry the liability. You must get a completed federal and provincial TD1 from each new employee, and a new one within seven days of a change to their situation that could reasonably affect their credits. Keep the forms with the employee's payroll records; do not send copies to the CRA. If an employee does not provide a form, withhold using the basic personal amount only — you are not permitted to assume any other credit.

Electronic forms are acceptable. The CRA permits an employer-created electronic TD1 provided it is identical in content to the official form, the employee signs it electronically with a certification that the information is accurate, and it is stored securely in a format the CRA can read and access on request. Most payroll platforms now collect the TD1 this way at onboarding, which removes the most common failure — a paper form that was never returned.

Applying the form means converting line 13 into a claim code and using it in the payroll calculation. The CRA's Payroll Deductions Online Calculator takes the federal and provincial claim amounts directly and produces the exact federal tax, provincial tax, CPP and EI for each pay, which is also the figure that should appear on the employee's statement of earnings. A letter of authority from a T1213 reduces the taxable income figure fed into that calculation; the additional-tax line is added after it.

The penalty exposure for a missing TD1 sits with the employee, but the exposure for wrong withholding sits with the employer: under-deducted tax that should have been withheld can be assessed against the business, with penalties and interest, when the CRA reviews the payroll account. Multi-province employers add a layer, because the provincial form has to match the province of employment for every worker. This is routine for our small business accounting clients and a frequent clean-up job when a business first outsources payroll after running it in-house.

1. Claiming the basic personal amount with two payers at once. The second form needs the multiple-employer box ticked and "0" on line 13.
2. Ticking "total income less than total claim amount" for a job that grows. The box switches withholding off for the whole year; a part-time job that becomes full-time needs a new form the week it changes.
3. Updating the federal TD1 and not the provincial one. Both forms carry the same boxes and both must reflect the change.
4. Leaving the spouse amount on the form after the spouse returns to work. Line 7 is worth up to $16,452 of credit; a spouse now earning above that figure makes it zero.
5. Claiming the full basic personal amount above $181,440 of net income. The 2026 amount phases down to $14,829 by $258,482; the worksheet gives the partial figure.
6. Ignoring untaxed income. CPP, OAS, rental and business income arrive without withholding; the additional-tax line exists to cover them.
7. Never revisiting a form signed years ago. Dependants age out, pensions start, disability certificates lapse or are approved. The form on file governs until you replace it.

Each of these produces the same result: a balance owing when the return is filed, and interest running from the following May if it is not paid on time. What that costs — and how quickly it escalates — is the subject of our guide to what happens if you don't pay taxes. The TD1 is the cheapest place to prevent it.

The TD1 is ten minutes of work that governs every paycheque for as long as it sits in your employer's file. Filled out well, it puts the credits you are entitled to into your pay from January rather than into a refund the following spring; filled out carelessly — or twice — it manufactures a balance owing and the interest that follows. The 2026 form asks one thing of most people (confirm $16,452 on line 1) and a few careful questions of everyone else: who you support, whether you have another payer, and whether any of your income arrives untaxed.

For employers, the form is the foundation of a compliant payroll: collected at hire, refreshed within seven days of a change, stored and never mailed to the CRA, and converted correctly into each employee's claim code. If your withholding has been producing large refunds or unexpected balances — for you or for your staff — we will review the forms on file and set them right, alongside the payroll itself. Fixed fees agreed up front, pay after the service, 100% remote across Canada; see our accounting and bookkeeping pricing, book a consultation online, or call +1 (416) 619-0068.