Question

Payroll. Canada. The TD1 form is used by employees to claim federal personal tax credits impacting their tax deductions. Choose three of the tax credit amounts available on the TD1 (except the basic personal amount) and explain who might claim these tax credits and how this will impact the employee's tax situation.

Answer 1

The following tax credits can be claimed in TD1:-

1. Canada caregiver amount for infirm children under age 18 – Either parent (but not both), may claim $2,182 for each infirm child born in 2001 or later, that resides with both parents throughout the year. If the child does not reside with both parents throughout the year, the parent who is entitled to claim the “Amount for an eligible dependant” on line 8 may also claim the Canada caregiver amount for that same child who is under age 18.

2. Pension income amount – If employee will receive regular pension payments from a pension plan or fund (excluding Canada Pension Plan, Quebec Pension Plan, Old Age Security, or Guaranteed Income Supplement payments), then $2,000 or his/her estimated annual pension income, whichever is less.

3. Tuition (full time and part time) – If employee is a student enrolled at a university or college, or an educational institution certified by Employment and Social Development Canada, and will pay more than $100 per institution in tuition fees. If he/she is enrolled full time or part time, credits for total of the tuition fees are available.