Filing your corporation's T2 return: deadlines and DIY

When is the T2 due, and when must the corporation pay?

The T2 is due six months after the corporation's tax year ends. Its unpaid tax is usually due two months after year-end, so waiting until the filing deadline can mean paying late (CRA: filing deadline; CRA: balance-due day).

The corporation's tax year is its fiscal period, which cannot exceed 53 weeks. A new corporation chooses its first year-end within that limit; a later change generally needs CRA approval. An acquisition of control or a change in CCPC status can create a shorter tax year and an extra return. If control is acquired within seven days after an established year-end, the corporation can elect to extend that year to the acquisition date by attaching an election letter to that year's T2, due six months after the extended year-end (CRA: tax year and election; CRA: filing deadline). Record the actual start and end dates before calculating either deadline.

What goes into a T2 return?

A T2 combines the corporation's identity and tax year, financial figures, adjustments from accounting profit to taxable income, tax calculations, and schedules that match its activities. It reports the corporation's income, not the owner's personal income; the corporation is a separate legal entity (CRA: corporation). The CRA's T2 guide organizes these across the return and its attachments.

For a first return after incorporation, the CRA requires Schedule 24 and Schedule 101, Opening Balance Sheet Information, plus details of certain non-cash share issues and transferred businesses where applicable (CRA: Schedule 24; CRA: first return attachments). Gather the incorporation and share records, year-end statements, prior T2 and notice of assessment, fixed-asset and capital cost allowance records, losses carried forward, and instalments paid. Other slips, GST/HST, and payroll filings are separate; see Which returns your business files. For corporate tax rates, see How corporations are taxed.

Can I file my corporation's T2 myself?

Yes. A business owner can prepare a T2 with CRA-certified software and transmit it through My Business Account. Corporation Internet Filing generally uses a Web Access Code for one corporation; request it through the CRA's online form (CRA: software and filing routes; CRA: access code). Filing it yourself means being able to support the figures and tax choices, not just entering the bookkeeping totals.

A practical order is to confirm the tax year and province, finish the records, reconcile the GIFI figures to the statements, review every relevant schedule, calculate tax and payments, then transmit and keep the CRA confirmation. Generally keep supporting records for six years from the end of the last tax year they relate to, or from the filing date if the return is late; some corporate records must be kept longer (CRA: keeping records). If an electronic transmitter files for the corporation, complete and retain a signed T183CORP for that tax year; do not send it to the CRA (CRA: T183CORP).

The first return, multiple corporations with shared owners, transfers between the corporation and a shareholder, or foreign activity can change the schedules and tax result. Those facts call for a careful review before filing.

Must the T2 be filed electronically, and what if I use paper?

For tax years starting after 2023, most corporations must file the T2 electronically. The CRA lists exceptions for insurance corporations, non-resident corporations, corporations reporting in functional currency, and corporations exempt from tax under section 149 (CRA: electronic filing).

A corporation required to file electronically that files on paper faces a $1,000 penalty (CRA: electronic filing penalty). The CRA says a mailed T2 bar code return is still a paper return for this purpose; fax is not accepted (CRA: paper return). A late-filing penalty or interest is a separate issue; see Penalties, interest, and relief.

What is GIFI, and do I need financial statements?

GIFI is the CRA's coded format for the balance sheet and income statement figures reported with a T2. Most corporations enter GIFI codes and amounts and do not mail separate paper statements with an electronic return. Insurance corporations involved in underwriting send financial statements instead and can attach them electronically (CRA: GIFI). A Quebec CO-17 separately requires full financial statements (Revenu Québec).

These are the CRA's GIFI schedules. The codes should cover the full statements, not only totals, and notes or an accountant's report are included if prepared (CRA: level of detail). How to produce the statements is covered in Year-end financial statements for a corporation.

How do I file a nil T2 for an inactive corporation?

An inactive corporation that must file still submits a T2 for its tax year, answering the inactive question at line 280 and reporting any amounts that remain on its records (CRA: current T2, page 3). The CRA permits an inactive corporation to omit Schedules 100, 125, and 141 only if it was inactive throughout the year and has no balance sheet or income statement information to report (CRA: inactive GIFI exception).

Check bank balances, share capital, loans, assets, interest, fees, and prior-year balances before treating the return as empty. A corporation can have no sales but still have a balance sheet or expenses. If it has reportable financial information, include the relevant GIFI schedules. The usual electronic-filing rule still applies. Whether a corporation with no income must file at all is explained in Which returns your business files.

The federal GIFI exception does not cover a Quebec CO-17: Revenu Québec requires a year-end balance sheet even for an inactive corporation (Revenu Québec: corporation income tax).

Can I still use the T2 Short Return?

Do not assume the T2 Short is a current electronic-filing route. The CRA still describes eligibility for certain CCPCs with nil income or a loss, or section 149 tax-exempt corporations, subject to further conditions, but its published T2 Short form is a paper form dated 2019. The CRA also says CCPCs must file electronically or face the mandatory-filing penalty (CRA: T2 Short and filing rule).

For a current CCPC return, use the regular T2 through certified software. If your corporation qualifies for an electronic-filing exception and you want to use the Short Return, confirm with the CRA that the available form is accepted for the tax year before mailing it.

Does my corporation also file a Quebec or Alberta return?

Possibly. Quebec and Alberta administer their own corporation income taxes; a federal T2 does not replace a provincial return where one is required (CRA: provincial administration).

A Quebec CO-17 is due within six months after year-end; pay any Quebec balance within two months after year-end to avoid interest (Revenu Québec). An Alberta AT1 is due within six months after year-end. Alberta's balance is generally due by the end of the second month after year-end; qualifying CCPCs can defer it to the end of the third month. Its instalment rules are separate (Alberta). An office or other fixed business place can be an establishment, but each province's definition covers other situations too (Revenu Québec: establishment; Alberta: permanent establishment). Check the provincial test if the corporation works there; its incorporation or mailing address alone does not settle it.

Must the corporation pay monthly or quarterly instalments?

Most corporations with tax payable above the applicable instalment test pay during the year, before the final balance-due day. A new corporation generally starts federal instalments in its second year; a corporation does not need federal instalments if the relevant tax payable for the current or previous year is $3,000 or less (CRA: instalment requirements).

Instalments are due on the last day of each complete month or quarter of the tax year. If the year starts mid-month, the first payment is due one month or quarter less a day after it starts (CRA: instalment dates). An eligible corporation choosing quarterly instalments answers yes at T2 line 293 (CRA: current T2, page 3). The CRA provides current-year and prior-year calculation options and does not send instalment reminders (CRA: calculation options; CRA: reminders). Quebec and Alberta tax is paid directly to those provinces; do not include it in CRA instalment calculations. Check their rules separately (CRA; Alberta).

When is the final T2 due after dissolution?

When a corporation is permanently dissolved with its incorporating authority, its final T2 covers the period ending on the dissolution date shown in the articles of dissolution. Mark line 078 as the final return and apply the normal six-month filing deadline from that shortened year-end (CRA: current T2, page 1; CRA: final return).

Do not treat stopping business as legal dissolution. The CRA says it may continue to regard the corporation as existing until it receives dissolution documents. Its final-return guidance also calls for a clearance certificate before a legal representative distributes property, to avoid personal liability for unpaid tax. The final asset distribution and tax-year date merit review before filing.

How do I correct a T2 after filing?

Ask the CRA to reassess the filed year; do not send a second complete original T2. The CRA accepts an electronic reassessment request through current tax software, bar-code information sent to the tax centre, or a letter identifying the corporation, business number, tax year, and correction (CRA: requesting a reassessment).

Include revised GIFI figures, schedules, or other support that explains the change. A loss or credit carryback may require its own schedule. If the change affects a Quebec CO-17 or Alberta AT1, correct that provincial filing too under the province's process (CRA: reassessment support; Alberta: amended AT1).

Example

Illustrative Canadian dollars. A corporation outside Quebec and Alberta has a December 31 year-end. Last year's tax was C$9,000; this year's estimated tax is C$12,000. Under the prior-year instalment option, it pays C$750 each month on time, or C$9,000 for the year, leaving C$3,000. The instalments go on T2 line 840 and reduce the balance owing (CRA: instalment options; CRA: current T2, page 9). If it does not qualify for the three-month balance-due rule, it pays the C$3,000 by the last day of February (or the next business day if that date falls on a weekend or CRA-recognized holiday) and files the T2 by the end of June. If final tax exceeds C$12,000, pay the extra when known; arrears interest runs on any balance unpaid after the balance-due day (CRA: arrears interest).

Different for you?

• No income or no business activity: Check whether a return is required in Which returns your business files.
• The year-end books are not ready: Start with Year-end financial statements for a corporation.
• Several years were missed: See Catching up on unfiled corporate returns.
• Money moved between you and the corporation: Review Shareholder loans.
• The corporation sells to US customers: Check whether it also needs a US filing in Canadian corporation US tax return.
• It is a first return, has associated companies or foreign activity, or is being dissolved: These facts can add filing steps. If you want help checking the return, bring the relevant records to tax preparation.