Corporate tax
T2 corporate tax return: what's in it, GIFI, schedules and how to file
What a T2 Corporation Income Tax Return contains: the 9-page return or the T2 Short Return, the GIFI financial statements, and the schedules most small corporations attach. Who files, mandatory e-filing, deadlines and penalties, from the CRA's T2 guide.
Prepared by Aldro Accounting · Updated · Sources checked
The quick answer
The T2 is the Canada Revenue Agency's corporation income tax return. Every resident corporation, including non-profits, tax-exempt and inactive corporations, must file one for every tax year within six months of its year-end, even with no tax payable, except tax-exempt Crown corporations, Hutterite colonies and registered charities. A T2 filing is the return itself plus GIFI financial statements and the schedules that apply, and for tax years starting after 2023 most corporations must file it electronically.
What the T2 return is
The CRA offers two corporation returns. The T2 Corporation Income Tax Return is nine pages and any corporation can use it. The T2 Short Return is two pages plus Schedule 1, Net Income (Loss) for Income Tax Purposes, and may also need Schedule 8, Capital Cost Allowance, and Schedule 50, Shareholder Information.
A corporation can use the T2 Short Return only if it is a Canadian-controlled private corporation (CCPC) throughout the year with nil net income or a loss for income tax purposes, or a corporation exempt from tax under section 149. It must also have a permanent establishment in only one province or territory, claim no refundable tax credits other than a refund of instalments paid, neither receive nor pay taxable dividends, and report in Canadian currency.
Who must file a T2
All resident corporations must file a T2 every tax year even if there is no tax payable. That includes non-profit organizations, tax-exempt corporations and inactive corporations. The exceptions are tax-exempt Crown corporations, Hutterite colonies and corporations that were registered charities throughout the year.
A non-resident corporation must 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, unless it meets specific exemption criteria. Non-resident corporations file the return, schedules and GIFI in Canadian funds only.
GIFI: the financial statements inside a T2
The General Index of Financial Information (GIFI) gives a unique code to each item usually found on a balance sheet, income statement and statement of retained earnings. For example, code 1001 is Cash and code 8810 is Office expenses.
Active corporations complete Schedule 141, GIFI Additional Information, to say who prepared the financial statements and how involved they were, even when there are no notes to the statements. A new corporation's first T2 includes Schedule 101, Opening Balance Sheet Information, with the share issuance agreements and any closing balance sheet of a predecessor business.
Scroll sideways to see all columns.
| Schedule | What it holds |
|---|---|
| Schedule 100 | Balance sheet information |
| Schedule 101 | Opening balance sheet, for a first-time filer |
| Schedule 125 | Income statement information |
| Schedule 141 | Additional information: who prepared the statements and their involvement |
Corporations that file on CRA-issued paper forms and have both gross revenue and assets under $1 million can use Form T1178, GIFI Short. With $1 million or more of either, they complete Schedules 100, 101 and 125. A corporation that was inactive all year with no balance sheet or income statement information doesn't attach Schedules 100, 125 and 141.
The schedules most small corporations attach
The CRA's T2 guide splits schedules into two groups. Information schedules give general information and report transactions with non-residents. Calculation schedules work out net income, taxable income, deductions, taxes and credits.
- Schedule 1: net income (loss) for income tax purposes.
- Schedule 8: capital cost allowance.
- Schedule 50: shareholder information.
- Schedule 9: related and associated corporations.
- Schedule 23: agreement among associated CCPCs to allocate the business limit.
- Schedule 11: transactions with shareholders, officers or employees.
- Schedule 88: internet business activities.
- Schedule 130: excessive interest and financing expenses limitation.
Associated corporations and the small business deduction
The small business deduction generally applies to up to $500,000 a year of a CCPC's qualifying active business income, called the business limit. Associated CCPCs share that limit using Schedule 23.
Associated CCPCs that claim the small business deduction or the enhanced 35% SR&ED investment tax credit, on up to a $3 million expenditure limit, file Schedule 9, Schedule 23 and Schedule 49.
How to file: mandatory electronic filing
For tax years starting after 2023, all corporations must file the T2 electronically, except insurance corporations, non-resident corporations, corporations reporting in functional currency and corporations exempt from tax under section 149. A corporation required to e-file that doesn't is charged a $1,000 penalty.
Software used to prepare a T2 must be CRA-certified. The return can be sent through the CRA's Corporation Internet Filing service, through My Business Account by the business owner, or through Represent a Client by an authorized representative or employee. A T2 Bar Code Return printed and mailed is a paper return, and a corporation required to e-file is charged the penalty for it.
A corporation that files through an electronic transmitter authorizes it each year on Form T183CORP and keeps the form instead of sending it to the CRA. Active corporations filing by internet or bar code select a NAICS code of up to six digits for their main business activity. Supporting documents can be sent with the T2 Attach-a-doc service at filing or within 24 hours.
Filing deadline, balance-due day and penalties
A corporation files its T2 within six months of the end of each tax year. If the year ends on the last day of a month, the return is due by the last day of the sixth month after. If not, it is due by the same day of the sixth month. To get a refund, the T2 must be filed no later than three years after the end of the tax year.
Filing and paying are separate. The balance of tax is generally due two months after year-end, or three months for an eligible CCPC that claims the small business deduction and whose taxable income the year before didn't exceed its business limit. Corporations pay monthly or quarterly instalments unless their Part I, Part VI, Part VI.1 and Part XIII.1 taxes for the current or previous year total $3,000 or less.
The late-filing penalty is 5% of the unpaid tax at the filing deadline plus 1% of it for each complete month late, up to 12 months. After a demand to file, a repeat failure costs 10% plus 2% a month, up to 20 months. Large corporations, with taxable capital employed in Canada over $10 million, face an extra monthly penalty for up to 40 months.
Records, slips and receipts must be kept for six years from the end of the last tax year they relate to. The CRA aims to process 95% of electronically filed T2 returns within 45 days.
Aldro's flat yearly price covers everything tax for the year, including the T2, its GIFI and schedules. Our team prepares and files it.
Worked example
Say a CCPC's tax year ends March 31, 2026. Because that is the last day of a month, its T2 is due by September 30, 2026, the last day of the sixth month after. If its year instead ended on August 15, the T2 would be due by February 15. Now say the corporation had $10,000 of tax still unpaid at the filing deadline and filed 3 complete months late. The late-filing penalty is 5% of $10,000 = $500, plus 1% x $10,000 x 3 months = $300, for $800 in total.
Common questions
What is a T2 corporation income tax return?
The CRA's return for corporations. It is the T2 itself, or the T2 Short Return where eligible, plus GIFI financial statements and the schedules that apply.
Does an inactive corporation have to file a T2?
Yes. All resident corporations file every year even with no tax payable, inactive ones included. An inactive corporation with no balance sheet or income statement information doesn't attach Schedules 100, 125 and 141.
How do I file a T2 return?
Electronically, for most tax years starting after 2023, using CRA-certified software through Corporation Internet Filing, My Business Account or Represent a Client. Missing the e-filing requirement costs $1,000.
When is the T2 due?
Within six months of the tax year-end. The balance of tax is due earlier: two months after year-end, or three months for eligible CCPCs.
What is GIFI on a T2?
The General Index of Financial Information: codes for each balance sheet, income statement and retained earnings item, such as 1001 for Cash. The financial statements go on Schedules 100, 125 and 141.
Who can use the T2 Short Return?
A CCPC with nil net income or a loss for the year, or a section 149 tax-exempt corporation, that also has a permanent establishment in only one province or territory and meets the CRA's other conditions.
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.
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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.
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- 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.
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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: Corporation income tax return · checked October 31, 2026
- CRA: Who has to file a T2 return · checked October 31, 2026
- CRA: T4012 T2 guide, Before you start · checked October 31, 2026
- CRA: T4012 T2 guide, Chapter 2 · checked October 31, 2026
- CRA: Using tax preparation software · checked October 31, 2026
- CRA: Preparing your financial statements using GIFI · checked October 31, 2026
- CRA: How relationships affect the small business deduction and SR&ED credits · checked October 31, 2026
This guide explains general rules from the sources listed. It isn’t tax advice for your situation.