In Compare mode, Timer1 must be running in either Timer mode or Synchronized Counter mode. The compare operation may not work in Asynchronous Counter mode. Reference Timer1 Module with Gate Control for more information on configuring Timer1.
Clocking Timer1 from the system clock (FOSC) should not be used in Compare mode. In order for Compare mode to recognize the trigger event, Timer1 must be clocked from the instruction clock (FOSC/4) or from an external clock source.