# T2 Corporate Income Tax Return

Country: Canada
When: 6 months after fiscal year-end to file. Balance of tax: 2 months after fiscal year-end (general) or 3 months after fiscal year-end (eligible CCPCs).

Annual corporate income tax return filed with the Canada Revenue Agency by all Canadian-resident corporations. The T2 is due within 6 months of the fiscal year-end. The balance of tax owing is due 2 months after year-end for most corporations, or 3 months for eligible CCPCs claiming the Small Business Deduction.

## Who this applies to

- All Canadian-resident corporations (including inactive corporations with nil income)
- Non-resident corporations with taxable income earned in Canada
- CCPCs claiming the Small Business Deduction (3-month payment rule)
- Holding companies and investment corporations

## What to file

T2 Corporation Income Tax Return with Schedule 1 (book-to-tax reconciliation), Schedule 8 (CCA), Schedule 411 (SBD for CCPCs), and all applicable provincial/territorial schedules. Provincial returns are generally co-filed with the T2 except Quebec and Alberta (which require separate provincial returns).

## How to file

Corporations with gross revenue over CAD 1 million must file electronically via T2 EFILE (tax software certified by CRA). Smaller corporations may file on paper but electronic filing is strongly recommended. Quebec corporations also file a CO-17 with Revenu Quebec. Alberta corporations file a separate AT1 return with the Alberta Tax and Revenue Administration.

## Payment due

Balance of tax: 2 months after fiscal year-end for most corporations. Eligible CCPCs (qualifying for the SBD and not associated with a corporation taxed at the general rate) have 3 months. Corporate instalment payments reduce the final balance.

## What happens if you miss it

Late filing penalty: 5% of unpaid tax plus 1% per month for up to 12 months. Second offence (within 3 years): 10% plus 2% per month for up to 20 months. Late payment interest: CRA's prescribed interest rate (currently approximately 9%) compounded daily.

## Submission checklist

- Finalise year-end financial statements (income statement and balance sheet)
- Complete Schedule 1 to reconcile book income to taxable income (add back depreciation, deduct CCA)
- Calculate CCA on Schedule 8 for all CCA classes
- Calculate the SBD on Schedule 411 for CCPCs (check passive income grind)
- Complete all applicable provincial schedules
- Ensure all instalment payments made during the year are credited
- EFILE via certified tax software or submit paper T2

## Common mistakes to avoid

- Paying the balance of tax late because the filing deadline (6 months) is confused with the payment deadline (2-3 months)
- Missing the passive income grind on the SBD when the CCPC has investment income
- Forgetting to file the Quebec CO-17 or Alberta AT1 separately for corporations in those provinces
- Not claiming eligible SR&ED credits because Form T661 was not attached

Source: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html