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

November 4, 2024

Tax time tends to be a frustrating part of the year. Understanding taxes can feel a lot more complex than it should. Although the Canada Revenue Agency (CRA) offers plenty of help, there’s still a lot to get to grips with. There are numerous forms and files you’ll need to fill out and double-check.

2 of the most common tax forms are the T1 and the T4. These forms are both taxpayer forms distributed by the CRA. 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 T4 tax forms. Read on to find out more.

Here’s What We’ll Cover:

What is a T1 Tax Form?
Who Needs to Fill Out a T1 Form?
Where Is the T1 Form Available?
What Needs to be Filled Out on a T1 Form?
When is the T1 Tax Form Due?
What is a T4 Tax Form?
Who Needs to Fill Out a T4 Form?
Where Is the T4 Form Available?
What Needs to Get Filled Out on a T4 Form?
When Does the T4 Tax Form Get Distributed?
Key Takeaways

What is a T1 Tax Form?

This form is a summary of all income taxes paid to the Canada Revenue Agency. All working Canadians need to fill out and file this form for each tax year. As well as summarizing all of the taxes paid to tax authorities, it also declares all of the income generated for the year.

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

Who Needs to Fill Out a T1 Form?

All Canadian residents need to fill out and file a T1 form. They need to do this for every tax year. If you are a business owner, you may have to fill out another version of the T1 form. Sole proprietors and partnerships need to fill in a T1 business tax form. 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 CRA allows individuals to obtain their T1 tax forms online using its 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 haven’t registered online, you can also obtain the T1 form by getting in touch with the CRA. You can do this by phone or mail.

What Needs to be Filled Out on a T1 Form?

A T1 tax form has 5 main sections that you’ll need to fill out before submission. Thankfully, these sections are fairly straightforward but will need some information from other tax forms. Here’s a description of the sections:

Identification: All details regarding the individual the tax form is for. If you are filling out a T1 business form, you’ll need to 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 get deducted. There are many allowable expenses that you may be able to claim.
Taxable Income: The income made after all deductions: this allows for the deduction of losses as well.
Refund or Balance Owing: The amount of money owed to the tax authorities, or the refund you’ll be receiving.

When is the T1 Tax Form Due?

All Canadian taxpayers must submit their T1 form by April 30 of the current year. For example, for the 2024 tax year, the T1 needs to be submitted by April 30, 2025.

The T4 tax form is similar to the T1. However, it is for Canadians who are salaried employees. We also refer to this form as the Statement of Remuneration Paid. It shows how much money you earned as an employee. It also shows how much the CRA withheld.

What is a T4 Tax Form?

Employers provide their employees with the T4 tax form. It details all of the income and tax information regarding the employee it relates to. 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 documents Employment Insurance contributions as well.

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. Along with the salaries paid, you’ll have to document all contributions and any income withheld. It is mandatory for employees need to get this every single year. Without it, 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 Get 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 the subtraction of deductions.
Pension Plan Contributions: This includes the Canada Pension Plan and Registered Pension Plans.
Employment Insurance Contributions: How much money got deducted for Employment Insurance
Taxes Withheld: How much money got deducted in taxes and paid to the CRA.
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, there needs to be a record of these under “other information.”

When Does the T4 Tax Form Get Distributed?

Employers must send T4 tax forms to employees annually. Each year, they need to distribute them by the end of February, according to the CRA. 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 feel overwhelming. However, when you’re comparing the T1 and the T4 forms, things are fairly straightforward. The T1 is a form filled out by employees and business owners, then submitted to the CRA. If you’re wondering how to pay taxes in Canada, the T1 form is a crucial part of the process. The T4 form, on the other hand, is filled out by employers and distributed to employees. The 2 forms provide similar information but have entirely different purposes.

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