Northern Residents: Save Taxes Now With New TD1

CRA has revised Form TD1 2016 Personal Tax Credits Return so that those who live in prescribed and intermediate northern zones can reduce their tax withholdings accordingly and get more of their hard earned money back throughout the year.

Taxpayers who live in a prescribed northern zone or a prescribed intermediate zone and complete their TD1 forms using the old version of the form may want to complete a revised form to minimize their withholding.

For 2016, the Northern Residence Deduction will be increased as follows:

• Residency deduction: Each member of the household can currently claim $8.25 per day when filing their 2015 tax returns by using Form T2222. But for tax year 2016 this rises to $11.00 per day. Remember there is a double deduction for a sole claimant: that is, if no one else in the household makes the claim, $22.00 per day may be claimed in 2016.
• Intermediate zones: Half the rates allowed in prescribed northern zones will be allowed; that is, $5.50 and $11.00 respectively.

Check out the new Form TD1 as well as Form T2222, which is used in making the claim. For a place-by-place description of eligibility for each province, see http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns248-260/255/zns-eng.html

The new rates will make a significant difference to take-home pay for those who qualify. To see the impact, check out the free trials of Knowledge Bureau Calculators: Income Tax Estimator and Take-Home Pay Calculator.

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