Happy New Year! We’re a few days into 2015, and I’ve come across several client files where the current Federal and Provincial TD1 amounts are NOT updating. This is a known issue in QuickBooks desktop and hopefully there will be a fix soon.
First things thing. Please make sure you have the latest tax table installed in your software by going to Employees < My Payroll Service > Tax Tables Updates. Here’s a link explaining this in greater detail:
Now that you’ve confirmed you have the latest tax table, it’s important that you check your TD1 Review List to make your employees have been updated with the current Federal and Provincial amounts. I run this report before running payroll at the start of every new calendar year. Here’s how to check:
Reports > Employees & Payroll > TD1 Review List
You will see a list of your employees. The columns contain the Payroll Province and Federal and Provincial ‘Current’ and ‘Suggested’ TD1. If the ‘Current’ doesn’t match the ‘Suggested,’double click on the amount. You will now be in the Taxes and TD1 for (Employee Name) window. Override the incorrect ‘Current’ amounts with the correct ‘Suggested’ amounts. NOTE: if you’ve ever used a ‘Custom’ amount (in other words, you’ve entered something other than the basic default amount into the employee profile), this amount will ALWAYS need to be manually updated, unless you change back to the basic ‘Suggested’ amount (and the updates are working properly). Now would be a good time to hand your ‘Custom Amount’ employees a blank Federal and Provincial TD1 form so you can update their tax credits in Quickbooks. Here’s the link to the forms for 2015:
It’s worth noting that “Individuals do not have to complete a new TD1 every year unless there is a change to their federal, provincial or territorial personal tax credit amounts. If a change happens, they must complete a new form no later than seven days after the change.” This is from the following page on the CRA website where you’ll find more information about form TD1:
If you’ve already run the first payroll of the year, don’t panic. Just go in and make the changes now.