Open navigation

2020 TD1 Aditional Details

As you know the final TD1 forms and corresponding worksheets have been released by the CRA, as of January 9th. 

 

Our approach here at Avanti was to populate the $12,298 basic amount into the Federal TD1 forms. The reasoning we used to select this value is that it ensures no employee will be undertaxed which meets compliance.  Per the updated communication from January 9th, excerpt below;

 "for 2020, employers can use a BPAF of $13,229 for all employees, while payroll systems and procedures are updated to fully implement the proposed legislation.  If the employer uses a BPAF of $13,229 for its employees, employees with net income above $150,473 can ask for additional tax to be deducted, by completing the form TD1." - https://www.canada.ca/en/revenue-agency/services/forms-publications/payroll/t4127-payroll-deductions-formulas/t4127-jan/t4127-jan-payroll-deductions-formulas-computer-programs.html#toc3


If you would like to, you may choose to  default to the rate of $13,229 as the basic amount on the Federal TD1 forms. We have created a script that will populate this basic TD1 value in place of the $12,298 value we applied with the recent Avanti 9.41 update. In running this script you need to understand that anyone in your organization who earns $150,473 or more per year will be undertaxed, and will owe the CRA up to an additional $139.65 when they file their personal income taxes.  Note that penalties for under remitting taxes will not applied by the CRA for this circumstances, as this is all authorized by them.  Script can be found at https://help.avanti.ca/support/solutions/articles/36000205195-2020-federal-td1-settings 


Please note that we will not be updating to the proposed sliding formula for base personal amounts, and will continue to follow entered/requested TD1 values, until such time as the Dec 9 2019 Ways & Means Motions results in finalised legislation, and is communicated officially via regulation from the CRA.


Also, note that there has been some additional lobbying from the Payroll Association, and others, on this topic. If there ends up being additional changes to this, via modification to the legislation, or re-interpretation of the regulation by the CRA or the courts, we will be communicating it to you and will be here to assist with any additional adjustments should they be necessary.


See also the CRA's FAQ on the topic at
https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/basic-personal-amount.html

C
Charles is the author of this solution article.

Did you find it helpful? Yes No

Send feedback
Sorry we couldn't be helpful. Help us improve this article with your feedback.