Personal Tax Form Changes Affect Payroll Source Deductions Now

 

The CRA released Form RC18E which is used to calculate employee's automobile benefits for 2008.  An employee may use a company vehicle for purposes other than business, and the personal use of the vehicle is considered a taxable benefit to the employee. This form will help determine the total automobile taxable benefit amount, and may be used to calculate the withholding deductions required for 2009. Please link to the form here.

 

 

Payroll deduction tables for each province have been released by CRA to incorporate the increased basic personal amounts, spouse or common-law partner amount and amounts for eligible dependents. The updated tables also introduce the increases to personal income tax thresholds announced in the budget. The new payroll deduction tables should be used beginning with the first payroll in April 2009.

 

It is important to note that the basic personal amounts and thresholds used in the newly released payroll deduction tables reflect the amounts announced in Budget 2009 when the deductions are commenced on April 1, 2009.  The amounts used are grossed up to incorporate the annual amounts over a nine month period (April - December) and are not reflective of the new personal amounts or thresholds.

 

 

As mentioned above, changes were made to personal amounts as a result of the Federal Budget issued on January 27, 2009.  Form TD1 has been revised for April 1, 2009 and will introduce changes to the tax withheld for the nine months from April to December 2009 as if the changes were in place for the entire year.  Form TD1-WS provides calculations for employees to calculate claim amounts for the age amount, caregiver amount and amount for infirm dependants to input on Form TD1.

 

Employers should have employees use the updated Form TD1, Personal Tax Credits Return (09-04) for pay received after April 1, 2009.