Entering Personal Tax Credits and Deductions

We know entering personal tax credits and deductions can be a confusing topic for many employers, but don't worry—you're not alone!

If you have questions about the TD1 or TP-1015.3-V forms or how to manage them in Humi, this article will explain everything you need to know.

Personal Tax Credits & Deductions

All employees are eligible for basic personal tax credits on the federal and provincial levels. This information is commonly collected via a TD1 Form provided by the Canada Revenue Agency (CRA) or the TP-1015.3-V Form provided by Revenu Québec (RQ). We’ll be using the TD1 form in our examples below.

At the provincial level, most have a similar form name with their province code next to it (for example, TD1ON for Ontario), except in Quebec where the form is called the TP.1015.3 Source Deductions Return.

Understanding the TD1 Personal Tax Credits Return & the Provincial Equivalent

The TD1 form is a document your employee fills out when they start their new job or when they experience a significant life change that affects their tax situation. It helps you calculate the amount of income tax to deduct from each pay.

It is not the employer's responsibility to fill out this form for their employees; however, you can support your employees by ensuring they understand why they should. It’s also important to encourage employees to review and update their tax forms as needed, especially after significant life changes such as marriage, divorce, or the birth of a child.

How to Add an Additional Tax Credit or Deduction in Humi

Humi will automatically apply the Basic Personal Amount for both the federal and provincial forms, though remember that this amount can change each year.

If the employee has submitted a Personal Tax Credits Return form claiming an amount other than the Basic Personal Amount, you’ll need to enter this information into Humi manually.

To do this:

1. In People, use the search bar to find the employee you require and click on their name.
2. Click on the Job & Pay tab on their employee profile and scroll down to the Personal Tax Credits and Deductions section.
3. In either the Federal or Provincial section, click the + Add button to open the creation window for personal tax amounts.
   • If they gave you the Federal form, fill in the amounts in the Federal section.
     • Enter the Calendar Year from the TD1 form provided.
     • In the Total Claim Amount field, enter the value on Line 13 Total Claim Amount from the TD1 form provided.
     • If the employee has entered a value on the form in the field Additional tax to be deducted on the TD1 provided, then enter this value into the corresponding box.

       The additional taxes to be deducted need to be entered on a Per Period Basis, not for the full year.

     • If the employee has entered a value on the form in the field Deduction for living in a prescribed zone on the TD1 provided, then enter this value into the corresponding box.
   • If they gave you the Provincial form, fill in the amounts in the Provincial section in the same way as you entered them in the Federal section.
4. When you’re ready, click the Save button.

That’s it! The tax credit will now appear on the employee’s profile, and it will adjust the amount of tax being withheld for them.

Frequently Asked Questions