If your T1135 defaults to "Self-Employed," it means the software has detected business activity elsewhere in your return. Try these troubleshooting steps:
On the actual T1135 form (Part A or Part B), there is a tick-box section for the Individual Code.
Code 1: Individual (not self-employed).
Code 2: Self-employed individual (or spouse is self-employed).
If the software has locked in Code 2, look at your Taxpayer Profile or Personal Information section. There is usually a question like, "Did you or your spouse carry on a business in 2025?" If this is checked "yes," the T1135 will default to self-employed.
Even if you don't have business income, if you accidentally opened a T2125 (Statement of Business Activities) or a Rental Income (T776) form just to "look at it," the software may now consider you a business filer.
Delete any empty T2125 or T776 forms from your "Forms List."
If your spouse has business income, the software is actually doing this correctly according to CRA rules. If they don't, check their profile for the same "Ghost" forms mentioned above.
Check if you have any entries on Lines 13500 through 14300. If you have any income entered as "Commission" or "Professional" (even if you consider yourself an employee), the software will classify you as self-employed.
If the issue persists, we recommend contacting our product support team by phone.
https://turbotax.community.intuit.ca/turbotax-support/en-ca/help-article/tax-return/contact-us/L1h8P...
They have access to tools we don't have here in the Community, like screenshare, and see the issues to escalate into an investigation if needed.
Feel free to let us know the result.
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