T4 Slip

The basic personal amount is a non-refundable credit that shelters a base level of income from federal tax, so income below it carries no federal tax. The amount is indexed every year, and the enhanced portion is phased out across the second-highest federal bracket, so taxpayers in the top bracket receive only the base amount. Each province and territory sets its own version. On Form TD1 you claim it so your employer withholds less; claim it with one employer only, or too little tax is withheld.

Filing is required once tax is owed, and also in several situations regardless of income, including selling property, repaying benefits, splitting pension income, or receiving a request to file from the CRA. Below the basic personal amount most people owe nothing, yet filing still pays: the Canada Child Benefit, the GST/HST credit and provincial credits are all calculated from a filed return. Check the basic personal amount for the year you are filing.

Holding a share outright cannot leave you owing money. The worst outcome is that it becomes worthless. You can end up owing money if you bought on margin, sold short, or invested with borrowed funds, because the debt survives the loss. On the tax side, a fall in value creates nothing to report; a loss only crystallises when you dispose of the shares, and a capital loss is applied against capital gains rather than against ordinary income.

The basic personal amount is the credit nearly every resident taxpayer can claim, and it sits on the first line of both the federal and the provincial TD1. It is already printed on the current year's form, and the federal amount is reduced for higher-income earners, so use the figure and worksheet on the form you were handed rather than a prior-year copy. If you hold two jobs at once, claim it on only one TD1.