Formal thought disorders (FTDs), a core feature of schizophrenia, have been subdivided into positive and negative types, and are clinically assessed by examining speech (objective) or patient introspection (subjective). Despite being associated with poorer treatment response and worse outcomes, FTDs have been understudied in patients with schizophrenia, in particular treatment-resistant schizophrenia (TRS) or schizoaffective disorder. We aimed to explore the relationship between the severity of positive and negative FTDs and neurocognition as well as social/occupational functioning in this clinical subgroup. This was a retrospective chart review conducted at the Clozapine Clinic at the Centre for Addiction and Mental Health, Toronto, Canada. We reviewed charted standardized assessment of FTDs using the Thought and Language Disorder (TALD) scale, neurocognition using the Brief Cognitive Assessment Tool for Schizophrenia (B-CATS), and functioning using the Social and Occupational Functioning Assessment Scale (SOFAS) between October 2022 and June 2023. Following the original factor structure of the TALD, we computed 4- factor scores that combined positive or negative and objective or subjective FTDs. We then explored the correlation between the scores from each TALD factor and the neurocognition and functioning scores. We analysed data for 23 outpatients on clozapine. After the Bonferroni adjustment, total TALD scores, indicating overall severity of FTDs, were strongly and inversely correlated with SOFAS scores (p < 0.001). A strong inverse correlation was found between the objective positive TALD factor and Letter-Number Span verbal working memory scores, r(21) = -0.63, p < 0.001. Our results demonstrate the strong relationship between FTDs, neurocognition, and social/occupational functioning in a sample of TRS outpatients. Within the cognitive domains assessed, verbal working memory impairment had the strongest correlation with positive FTDs, such as derailment or tangentiality. These findings highlight the value of employing standardized psychopathological scales for FTDs in clinical practice.