Should you give TD1BC forms to your employees?
In short, yes. As an employer, you (or your Accounting or Human Resources (HR) department) are responsible for making appropriate tax deductions on your employees’ earnings. The Canada.ca website advises employers to send their workers a link to the relevant web page (see “Useful links” below) rather than give them a paper form. Employees can then fill out the document and return it to you in paper or digital format.
It is also possible for employers to create custom TD1BC forms. There are a number of benefits to this approach. First, the self-made form can be hosted online without the need for any paper documents. Second, electronic forms can be synced with a backend database, completely removing the need for time-consuming manual data entry. Finally, the form can be simplified to make it easier for employees to complete.
If you are responsible for collecting tax information from employees, it is important to ensure that any custom forms meet regulations set out by the CRA. They must, for example, mirror the TD1BC issued by the CRA, be readily accessible to officials, and include a submission date and method of identity verification.
What are the tax credits for people that live in British Columbia in 2021?
Tax credits usually change every year. This does not mean, however, that you need to submit a new form. Employers will use the information you have previously provided to calculate your tax credit entitlements.
The tax credits for British Columbia in 2021 are as follows:
- Basic personal amount – $11,070
- Aged over 65 with net income lower than $36,954 – $4,964
- Pension income amount – $1,000 (or full pension amount if it is lower)
- Disability amount – $8,303
- Spouse or common-law partner amount with income less than $948 – $9,479 (the amount for eligible dependents is the same)
It is important to remember that the TD1BC does not cover all possible tax credits. You may still need to fill out other forms like the T2201 Disability Tax Credit Certificate and T1213 form (which covers, among other things, child care expenses).
For a complete overview of all forms issued by the CRA, visit the Government of Canada website.
Should you use PandaDoc to create and distribute a TD1BC form?
If you are an employer, using a service like PandaDoc can help you save significant amounts of resources. Use our free TD1 British Columbia template to create a custom form. You can host it securely online and connect it to your backend database, where employee information will be readily available for payroll tasks.
PandaDoc’s entire library of templates, including federal TD1 forms for different years, are included on all free and paid plans. We also offer an extensive library of integrations for syncing up your tech stack.
Sign up for a free PandaDoc trial (or stick with the “forever free” version) to see if our platform is a fit for your business.
What is a TD1BC or British Columbia Personal Tax Credits Return?
A TD1BC, also called a “British Columbia Personal Tax Credits Return” or “TD1 for British Columbia”, is a tax document issued by the Canada Revenue Agency (CRA). It enables organizations to collect information about employees’ tax credit entitlements and make appropriate deductions when conducting payroll tasks. In this way, the CRA ensures that working individuals pay the correct amount of tax.
The difference between a federal and a provincial TD1 form is worth noting. Generally speaking, Canadian citizens and other people working in Canada need to fill out two forms: a generic TD1 that covers federal taxes that everybody must pay and a province-specific TD1 form that relates to a particular area. Local TD1 forms are named according to their province. The label “TD1BC”, for example, stands for “TD1 British Columbia”.
While new TD1 forms are issued every year, it is only necessary for employees to submit a new form if their tax circumstances change. Otherwise, an employer will use the information they already have on file.
Who needs to fill out and submit a TD1BC?
The circumstances in which an employee needs to fill out a TD1BC are relatively straightforward.
Here is a quick overview of the main criteria:
- You have started paid work for an organization.
- Your tax circumstances change. You may, for example, become eligible for child care, retirement, or disability benefits.
- You have recently moved to British Columbia. You are taxed based on where you reside, not where you work.
- You have earnings from other sources and wish to pay tax throughout the year on these earnings, rather than as a single sum based on your tax return. In this case, you are asking your employer to deduct a greater amount of ore tax from your regular earnings.
If one of the above points applies to you, it is important to fill out and submit a TD1BC as soon as possible. Failure to do so can result in fines.
The CRA also provides a worksheet to help individuals work out partial tax credits that are dependent on earnings, such as for people over sixty-five with incomes between $36,954 and $70,048.