TD1 Tax Form Explained for Newcomers in Canada: Don't Overpay Your Taxes in 2026

When you start a new job in Canada, your employer will hand you a form called the TD1. Many newcomers stare at it blankly, fill in only their name, or worse — ignore it entirely. This can result in your employer deducting far more income tax from your paycheque than necessary. Understanding the TD1 is one of the simplest ways to keep more money in your pocket every month.

This guide explains what the TD1 is, what personal tax credits you can claim as a newcomer, and how to fill it in correctly for 2026.

What Is the TD1 Form?

The TD1 is the Personal Tax Credits Return form issued by the Canada Revenue Agency (CRA). It tells your employer how much federal (and provincial/territorial) income tax to deduct from your pay each period.

There are actually two TD1 forms you need to complete when you start a job:

• TD1 (Federal): Calculates your federal personal tax credits.
• TD1 [Province Code] (Provincial): Calculates your provincial or territorial personal tax credits. For example, TD1ON for Ontario, TD1BC for British Columbia, TD1AB for Alberta, etc.

Both must be submitted to your employer. Many employers provide both forms together in a new-hire package.

Why Does It Matter?

If you submit a TD1 without claiming your eligible credits, your employer will deduct income tax as if you have no credits at all. This means you will receive a larger tax refund at the end of the year when you file your return — but you will have been lending the government money all year interest-free. It is much better to claim your credits upfront so your paycheques are higher throughout the year.

Key Credits You Can Claim on the TD1 in 2026

1. Basic Personal Amount (Line 1 — Federal)

Every Canadian resident can claim the Basic Personal Amount — in 2026, this is approximately $16,129 federally. This means the first $16,129 of your income is not taxed. Always claim this amount unless you have another employer or pension source where you have already claimed it.

Important for newcomers: If you arrived partway through the year, your basic personal amount may need to be prorated for the number of days you were a resident of Canada in that year.

2. Spouse or Common-Law Partner Amount (Line 2)

If your spouse or common-law partner lives with you in Canada and earns little or no income (typically below the basic personal amount), you can claim an additional amount for them. This can add over $16,000 to your total claim, significantly reducing the tax withheld from your pay.

3. Amount for an Eligible Dependant (Line 3)

If you are a single parent supporting a child under 18 (or a dependent adult relative), you may be able to claim this credit. You cannot claim both the spouse amount and the eligible dependant amount for the same person.

4. Canada Caregiver Amount (Line 4)

If you support a dependent with a physical or mental impairment (such as an elderly parent or a child with a disability), you may be eligible for an additional caregiver credit.

5. Disability Amount (Line 5)

If you have a severe and prolonged physical or mental impairment, and you hold a valid Disability Tax Credit Certificate (Form T2201), you can claim this amount.

6. Pension Income Amount (Line 6)

If you receive pension income (including from a foreign pension), you may be able to claim up to $2,000 federally.

7. Tuition Amount (Line 7)

If you are a student enrolled at a Canadian university or college, you can claim eligible tuition fees on your TD1 to reduce withholding.

What NOT to Claim on a TD1

The TD1 is only for non-refundable personal tax credits. Do not use it to claim:

• RRSP contributions (deduct these on your annual tax return)
• Charitable donations (claim on your annual return)
• Medical expenses (claim on your annual return)
• Moving expenses (claim on your annual return)

How to Fill Out the TD1 Correctly

1. Download the latest version from the CRA website (canada.ca/td1) — always use the current year's form, as amounts change annually.
2. Enter your name, SIN, date of birth, and address.
3. Fill in each applicable credit line using the exact amounts shown on the form.
4. Add up all your credits and enter the total on the last line.
5. Sign and date the form and give it to your employer's payroll department.
6. Complete the provincial TD1 (e.g., TD1ON) using the same process with provincial credit amounts.

If You Have More Than One Employer

If you work two jobs simultaneously, only claim credits with your primary employer. With your second employer, leave the form at the default (no credits claimed — only the basic personal amount). Claiming credits with both employers can result in owing taxes at year-end because your combined income would be taxed at a higher rate.

Updating Your TD1 Mid-Year

Your life situation may change during the year — you get married, have a child, or your spouse starts working. You can submit a new TD1 to your employer at any time during the year, and the updated withholding will apply from the next pay period.

What Happens If You Don't Submit a TD1?

If you don't submit a TD1, your employer must use a default withholding that assumes only the basic personal amount. You'll still get a refund when you file your taxes, but your monthly paycheques will be lower than necessary. Submit the form.

Frequently Asked Questions

I started working in Canada partway through the year. Do I prorate my basic personal amount?

Technically, yes — the TD1 instructions include proration guidance for part-year residents. However, many newcomers simply claim the full amount and then reconcile on their annual tax return. Consult a tax professional if you are unsure.

My spouse hasn't worked since we arrived. Can I claim the spouse amount?

Yes. If your spouse lives with you in Canada and has no income or income below the threshold, you can claim the spouse amount on Line 2 of the federal TD1.

Is the TD1 the same as a tax return?

No. The TD1 is an internal form given to your employer to guide tax withholding. Your annual tax return (T1) is what you file with the CRA to reconcile your actual tax owing based on your total year's income and credits.

Where can I get the TD1 form?

From your employer's HR/payroll department, or directly from the CRA website at canada.ca/td1. Always use the most current year's version.

Canadian taxes can be confusing when you are new to the system. The WelcomeAide AI assistant can explain any line of the TD1, help you understand what you can claim, and connect you to free tax filing resources like the Community Volunteer Income Tax Program (CVITP). Visit WelcomeAide for free guidance — available 24/7 in your language.