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7 Min. Read

T1 Vs T4 Tax Form: What’s the Difference?

Tax time is always a frustrating part of the year. Taxes always seem to be a bit more complicated than they should be. While the Canada Revenue Agency is good about assisting, there’s still a lot to sift through. There are numerous forms and files to be filled out and double-checked.

Two of the most common tax forms are the T1 and the T4. These forms are both taxpayer forms distributed by the Canada Revenue Agency. While they may be similar, they serve different purposes. In this article we’ll be covering everything you need to know about the T1 and the T4 tax forms. Keep reading to find out more.

Here’s What We’ll Cover:

Everything About the T1 Tax Form

Everything About the T4 Tax Form

Key Takeaways

Everything About the T1 Tax Form

The T1 tax form is formally known as the Income Tax and Benefit Form. It is a form required to be filled out by all Canadians. This form contains a large amount of information, and we’ll be going over it line by line, as if it were in front of you.

What Is the T1 Tax Form?

This form is a summary of all income taxes paid to the Canada Revenue Agency. It is required for all working Canadians to fill out and file this form for each tax year. In addition to summarizing all of the taxes paid to tax authorities, it also declares all of the income generated for the year. 

When looked at a whole, the T1 tax form is a summary of all other tax forms that you may fill out. It summarizes all of the income taxes paid, as well as the income made for the year. While it isn’t your only tax document, it could be considered a snapshot of all of the others you may have. 

Who Needs to Fill Out a T1 Form?

It is required for all Canadians to fill out and file a T1 form. This is to be done for every tax year. If you are a business owner, you may have to fill out another version of the T1 form. For sole proprietors and partnerships, a T1 business tax form is required as well. If you are the owner of a corporation, however, you’ll have to fill out a T2 form. This is necessary for all corporate income.

Where is the T1 Form Available?

There are many ways to get a copy of your T1 form. The easiest, however, is by going online. The Canada Revenue Agency allows individuals to obtain their T1 tax form online using the CRA My Account service. There you can find your T1 for the current year, as well as the T1 for any of the previous 11 years filed.

If you aren’t registered online, the T1 form can also be obtained by getting in touch with the Canada Revenue Agency. This can be done by phone, or by mail.

What Needs to be Filled Out on a T1 Form?

A T1 tax form has five main sections that have to be filled out before submission. Thankfully, these sections are fairly easy to fill out, and require some information from other tax forms. The sections are described below:

  • Identification: All details regarding the individual the tax form is for. If you are filling out a T1 business form, you’ll provide business details as well.
  • Total Income: All of the money you made for the year. This includes income from all sources.
  • Net Income: The income you are left with after any expenses have been deducted. There are many allowable expenses that can be claimed.
  • Taxable Income: The income that was made after all deductions have been made. This allows for losses to be deducted as well.
  • Refund or Balance Owing: The amount of money that is owed to the tax authorities, or the refund you’ll be receiving. 

When is the T1 Tax Form Due?

All Canadian taxpayers are required to submit their T1 form by April 30 of the current year. For example, for the 2021 tax year, the T1 needs to be submitted by April 30 2022. 

Everything About the T4 Tax Form

The T4 tax form is similar to the T1. However, it is for Canadians who are salaried employees. This form is also known as the Statement of Remuneration Paid. It shows how much money you earned as an employee. It also shows how much was withheld and sent to the Canada Revenue Agency. 

What is the T4 Tax Form?

The T4 tax form is provided to employees by employers. It details all of the income and tax information regarding the employee it is for. It lists your salary, mandatory payroll deductions, vacation pay, bonuses, and union dues. It also contains information regarding pension plan contributions. This includes the Canada Pension Plan and Registered Pension Plans. It also documents Employment Insurance contributions. 

Who Needs to Fill Out a T4 Form?

Employers who have paid someone at least $500 for the tax year need to fill out a T4 form. This includes most employers, of course. Along with the salaries paid, you’ll have to document all contributions and any income withheld. This information needs to be given to employees every single year. It’s mandatory. Without this information, employees cannot submit their tax information.

Where is the T4 Form Available?

The T4 tax form is available from your employer, if you’re an employee. Additionally, past T4 forms can be found using the CRA My Account service.

Employers can generate T4 forms for employees using accounting software options. This makes providing tax documents to employees simple. 

What Needs to be Filled Out on a T4 Form?

Employers need to fill out T4 forms for their employees every year. On each T4 form, the following information needs to be present:

  • Total Income: The amount of income made before deductions and withholdings.
  • Net Income: The money made after deductions have been subtracted.
  • Pension Plan Contributions: This includes the Canada Pension Plan and Registered Pension Plans.
  • Employment Insurance Contributions: How much money was deducted for Employment Insurance
  • Taxes Withheld: How much money was deducted in taxes and paid to the Canada Revenue Agency.
  • Union Dues: Payments made to unions on the employee’s behalf.
  • Charitable Contributions: Money donated to charities on the employee’s behalf. 
  • Special Tax Codes: If an employee has any special tax codes, they need to be recorded under “other information.”

When is the T4 Tax Form Distributed?

Employers are required to send T4 tax forms to employees annually. Each year, they need to be distributed by the end of February, according to the Canada Revenue Agency. If an employee changes jobs, it is their responsibility to provide an updated address to receive their T4 tax form.

As an employer, you may receive requests for past T4s, as well. Providing copies to past employees for previous tax years is easy. It can be accomplished by using good accounting software, along with document management. Being on top of both of these areas is important for business owners. 

Key Takeaways

Tax time can be a bit convoluted. However, when you’re comparing the T1 and the T4 forms, things are pretty clear. The T1 is a form filled out by employees and business owners, then submitted to the Canada Revenue Agency. The T4 form, on the other hand, is filled out by employers and distributed to employees. The two forms provide similar information, but are used in entirely different ways. 

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