Corporations
Corporate tax filing services in Canada: what a T2 filing involves
Who has to file a T2, the six-month filing deadline, the two- or three-month balance-due day, mandatory e-filing, CRA penalties and 2026 corporate tax rates by province, with CRA sources.
Prepared by Aldro Accounting · Updated · Sources checked
The quick answer
Every resident corporation in Canada, including inactive and non-profit corporations, has to file a T2 Corporation Income Tax Return with the Canada Revenue Agency (CRA) for every tax year, even with no tax payable. The T2 is due within six months of the end of the tax year, but the balance of tax is generally due two months after year end, or three months for qualifying Canadian-controlled private corporations (CCPCs). For tax years starting after 2023, most corporations have to file electronically or face a $1,000 penalty.
Who has to file a T2 return
The CRA says all resident corporations have to file a T2 return for every tax year, even if there is no tax payable. That includes non-profit organizations, tax-exempt corporations and inactive corporations.
The only exceptions are tax-exempt Crown corporations, Hutterite colonies and corporations that were registered charities throughout the year.
A non-resident corporation has to file if, at any time in the year, it carried on business in Canada, had a taxable capital gain or disposed of taxable Canadian property, with limited exceptions. Non-resident corporations file their T2, schedules and General Index of Financial Information (GIFI) in Canadian funds only.
T2 filing deadline and balance-due day
File the return within six months of the end of each tax year. A corporation's tax year is generally its fiscal period. When the tax year ends on the last day of a month, the return is due by the last day of the sixth month after year end. When it ends on another day, the return is due by the same day of the sixth month after year end.
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| Tax year ends | T2 filing due date |
|---|---|
| March 31 | September 30 |
| August 31 | February 28 |
| September 23 | March 23 |
| October 2 | April 2 |
When a filing due date falls on a Saturday, Sunday or public holiday recognized by the CRA, the return is on time if the CRA receives it or it is postmarked on or before the next business day. To get a refund, a return has to be filed no later than three years after the end of the tax year.
Paying is a separate date. Generally, corporation taxes are due two months after the end of the tax year. For Part I, VI, VI.1 and XIII.1 tax, the balance is due three months after year end if the corporation was a CCPC throughout the year, claimed the small business deduction for the current or previous year, and its previous-year taxable income (or the associated group's) didn't exceed its business limit.
Corporations also pay tax in monthly or quarterly instalments, unless their total Part I, VI, VI.1 and XIII.1 tax for the previous year or the current year is $3,000 or less.
How a T2 is filed
For tax years starting after 2023, all corporations have to file their T2 electronically, except insurance corporations, non-resident corporations, corporations reporting in functional currency and corporations exempt from tax under section 149. The CRA charges a $1,000 penalty when a corporation required to file electronically doesn't. Printed T2 bar code returns count as paper returns and get the same penalty.
The CRA certifies commercial tax software. A return prepared with certified software can be filed through the CRA's Corporation Internet Filing service, through My Business Account by the owner, or through Represent a Client by an authorized representative. Tax preparers who prepare more than 5 returns have to file them electronically, and that rule covers T2 returns.
A corporation that files through an electronic transmitter authorizes it each tax year on Form T183 CORP. Since June 22, 2023, that form can be signed electronically. It isn't sent to the CRA but kept in case the CRA asks for it. T2 Auto-fill lets software download information from the CRA, and T2 Attach-a-doc lets a corporation attach supporting documents when it files or within 24 hours.
The full T2 return has nine pages. The T2 Short Return is two pages plus Schedule 1, and may also need Schedule 8 (capital cost allowance) and Schedule 50 (shareholder information). The CRA says it processes 95% of electronically filed T2 returns within 45 days.
Federal and provincial corporate tax rates
The basic federal rate of Part I tax is 38% of taxable income, 28% after the federal tax abatement. After the general tax reduction, the net rate is 15%. For CCPCs claiming the small business deduction, the net federal rate is 9%.
Quebec and Alberta run their own corporate income tax systems, so corporations earning income there file separate provincial returns. The CRA administers corporate tax for every other province and territory, calculated on Schedule 5 of the T2.
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| Province or territory | Lower rate | Higher rate | Business limit |
|---|---|---|---|
| British Columbia | 2% | 12% | $500,000 |
| Manitoba | nil | 12% | $500,000 |
| New Brunswick | 2.5% | 14% | $500,000 |
| Newfoundland and Labrador | 2.0% (from January 1, 2026) | 15% | $500,000 |
| Northwest Territories | 2% | 11.5% | $500,000 |
| Nova Scotia | 1.5% | 14% | $700,000 |
| Nunavut | 3% | 12% | $500,000 |
| Ontario | 2.2% (from July 1, 2026) | 11.5% | $500,000 |
| Prince Edward Island | 1% | 15% | $600,000 |
| Saskatchewan | 1% | 12% | $600,000 |
| Yukon | 0% | 12% | $500,000 |
Provinces and territories generally have a lower rate for income eligible for the small business deduction and a higher rate for all other income. If a rate changes during the tax year, the calculation is based on the number of days each rate is in effect.
CRA penalties for corporations
Corporations keep paper and electronic records for six years from the end of the last tax year they relate to, or six years from the filing date if the return was filed late.
- Late filing: 5% of the unpaid tax due on the filing deadline, plus 1% of that unpaid tax for each complete month late, up to 12 months
- Repeated late filing (after a demand to file and a failure-to-file penalty in any of the three previous tax years): 10% of the unpaid tax, plus 2% for each complete month late, up to 20 months
- Not filing electronically when required: $1,000
- Instalment penalty: may apply when instalment interest is more than $1,000
- Repeated failure to report income: applies when a corporation leaves out $500 or more of income in a tax year and in any of the three previous tax years
- False statements or omissions made knowingly or through gross negligence: the greater of $100 or 50% of the understated tax
What a corporate filing service handles
A T2 filing pulls together the year's financial statements in GIFI format, the T2 schedules, the provincial calculation on Schedule 5, and the payment and instalment dates above. Inactive corporations still file every year.
Aldro is the cheapest way to get your business taxes done: $399 flat, with bookkeeping at $20 a month. The flat yearly price covers everything tax for the year, including the T2 and the owner's T1 when the business income needs it, and Canadian customers pay the same number in CAD. Our team prepares and e-files the return.
Worked example
Say a CCPC's tax year ends March 31. Its T2 is due September 30, the CRA's own example. If it owes $10,000 of tax and files four complete months late with that balance still unpaid, the late-filing penalty is 5% of $10,000 ($500) plus 1% for each of the four months ($400), or $900. A corporation with a repeat failure-to-file history would instead face 10% ($1,000) plus 2% for each month ($800), or $1,800.
Common questions
Does an inactive corporation have to file a T2?
Yes. The CRA says all resident corporations, including inactive ones, file a T2 for every tax year even with no tax payable. The only exceptions are tax-exempt Crown corporations, Hutterite colonies and registered charities.
When is a corporate tax return due in Canada?
Within six months of the end of the tax year. A March 31 year end has a September 30 filing due date.
Is the tax due when the T2 is filed?
No. The balance is generally due two months after year end, or three months for CCPCs that claimed the small business deduction and stayed within their business limit the previous year.
Is electronic filing mandatory for a T2?
Yes, for tax years starting after 2023, except for insurance corporations, non-resident corporations, corporations reporting in functional currency and tax-exempt corporations. The penalty for not complying is $1,000.
Do Quebec and Alberta corporations file a separate provincial return?
Yes. Quebec and Alberta administer their own corporate income tax, so corporations earning income there file separate provincial returns. Other provinces and territories are calculated on Schedule 5 of the T2.
Aldro
The cheapest way to get your business taxes done: $399 flat.
Business tax filing is $399 CAD a year, and it covers everything tax for that year. US clients pay in USD. Canadian clients pay the same number in CAD.
How it works
- Tell us about your business. A two-minute form. No payment is collected through it.
- Get your next steps by email. We’ll email you the next steps within one business day. After you sign up we’ll send you a secure upload link for your documents.
- We file it. Our team prepares and files your return. Add bookkeeping for $20 a month if you want it.
What's included
$399 a year covers everything tax for that tax year.
- Every business return for the year. All the federal and state or provincial business returns you need for the tax year: Schedule C, 1065, 1120-S, 1120 and their state returns in the US; T2, or T1 with T2125, in Canada.
- More than one state. Multi-state returns are included at the same price.
- Your personal return. The owner’s personal return (1040 or T1) is included when it’s needed for the business income.
- Quebec. Quebec returns (CO-17, TP-1 and TP-80) are included. Our Quebec pages are in French, and our team works with you in English.
- Extensions and reminders. Extensions (Form 7004 or 4868) and quarterly estimate reminders are included.
- Information returns. 1099-NEC, T4/T4A and T5018 slips are included in the tax price.
- City and excise returns. City and local business tax returns, and state excise returns such as Washington B&O, are included in the yearly price.
- Franchise tax reports. State franchise tax reports, such as the Texas franchise tax report, are included.
- Estimated tax and instalment amounts. We work out your quarterly estimated tax payments in the US, or your CRA instalments in Canada, and tell you what to pay and when.
- Unfiled past years. Each unfiled prior-year return is $399 per tax year, the same flat price.
- Bookkeeping at $20 a month. Unlimited bank and card accounts, monthly reconciliation and monthly statements.
Basic inventory tracking for online stores, such as Shopify, is included. Full cost-of-goods reconciliation is quoted separately. Payroll processing and sales-tax filing aren’t included in bookkeeping. US clients pay in USD. Canadian clients pay the same number in CAD. Our team prepares and files your return.
Sources
- CRA: Find out if you have to file a corporation income tax return (T2) · checked October 31, 2026
- CRA: T4012 T2 Corporation Income Tax Guide, Before you start · checked October 31, 2026
- CRA: When to file your corporation income tax return · checked October 31, 2026
- CRA: Balance-due day · checked October 31, 2026
- CRA: Avoiding penalties (corporations) · checked October 31, 2026
- CRA: Information for discounters and tax preparers · checked October 31, 2026
- CRA: Corporation tax rates · checked October 31, 2026
- CRA: T4012 Chapter 8, Provincial and territorial taxes · checked October 31, 2026
This guide explains general rules from the sources listed. It isn’t tax advice for your situation.