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A business income tax return is either form T2125 attached to your personal T1 (sole proprietors) or a T2 return (corporations). Self-employed people filed the 2025 return by June 15, 2026 and file the 2026 return by June 15, 2027, but any tax owing is due April 30. A corporation files within six months of its year end.
Which business income tax return do you file?
Your legal structure decides it. If you run the business under your own name, or in a partnership with no corporation, you report the income on your personal T1 and attach form T2125, the statement of business or professional activities. Each separate business or professional activity gets its own T2125. The net income is added to your other income and taxed at personal rates.
A corporation is its own taxpayer. The CRA says resident corporations file a T2 for every tax year, including inactive ones and ones with no tax payable. The only exceptions it lists are tax-exempt Crown corporations, Hutterite colonies and registered charities. Most corporations now have to file the T2 electronically, and the CRA charges a $1,000 penalty if a required electronic filer does not.
If you never signed incorporation papers, you are almost certainly a sole proprietor. If you did, the company files its own return, and your personal T1 is a separate filing. For a side-by-side look at what each costs in tax, see our page on the business tax return and what the bill looks like.
When is a business income tax return due in 2026 and 2027?
The CRA has published the 2027 dates, which cover the 2026 tax year. The 2025 dates below are the ones that applied in 2026.
| Who | File by | Pay by |
|---|---|---|
| Self-employed person, 2025 return | June 15, 2026 | April 30, 2026 |
| Self-employed person, 2026 return | June 15, 2027 | April 30, 2027 |
| Self-employed instalments, 2027 | March 15, June 15, September 15 and December 15 | |
| Corporation (T2) | Six months after year end | Generally two months after year end, three for a CCPC claiming the small business deduction if conditions are met |
| GST/HST annual filer | Generally three months after the fiscal year end. For a self-employed person with a December 31 year end, pay April 30 and file June 15 | |
One trap catches people every year. June 15 moves only the filing date. Tax owing is still due April 30, and interest on a balance starts after that date. A June filer who waits until June to pay is late on the payment. The tax instalments calculator shows what the four instalment payments look like if the CRA asks you to make them.
What does a year look like for one sole proprietor?
Take Jordan, a self-employed electrician in Red Deer with a December year end. Her calendar for the 2026 tax year runs like this:
- Through 2026: instalments on March 15, June 15, September 15 and December 15, if the CRA has told her to pay them.
- Early 2027: collect slips, bank statements and invoices, and total income and expenses for the year.
- April 30, 2027: pay any balance owing. Filing in May does not move this date.
- June 15, 2027: last day to file the return with form T2125.
She also puts a share of every invoice into a separate savings account, so the April payment does not come out of the chequing account she lives on. Records go in one folder, since the CRA says to keep receipts, invoices and supporting documents for business income and expenses, on paper or electronically.
How does the tax compare for a sole proprietor and a corporation?
Take a business with $80,000 of net income in Ontario. As a sole proprietor, the self-employed tax calculator gives $13,233.57 of income tax and $8,892.90 of CPP, $22,126.47 in all, about 27.7% of the income. That leaves $57,873.53. EI and GST/HST are not in that figure.
As a corporation, the corporate tax calculator shows $9,356.80 on the same $80,000, an average of 11.7%. Federal tax at the 9% small business rate is $7,200, and Ontario adds $2,156.80.
That $9,356.80 is only the company's tax. Nothing has reached you yet, and paying yourself a salary or dividend brings personal tax that the calculator does not count. Ontario also cut its small business rate on July 1, 2026, so the calculator prorates a calendar year. That blend is our own derived figure, not a published rate, and a corporation with another year end gets a different result.
What happens if you file or pay a business return late?
For a personal return with a balance owing, the CRA's late-filing penalty is 5% of the balance plus 1% for each full month the return is late, up to 12 months. If you were penalized and received a demand to file in any of the last three years, it rises to 10% plus 2% a month, up to 20 months. A corporation faces the same 5% and 1% structure on its unpaid tax.
Say Jordan owes $4,000 and files three full months after June 15. The penalty is $200 plus $120, or $320, and interest runs on top. The penalty applies only when tax is owing, which is why paying on time matters more than the filing date.
What else goes wrong with business filings?
The first slip is thinking no income means no return. For a corporation that is wrong, because the T2 is due every year. The second is paying on June 15 instead of April 30.
Keep your records for six years from the end of the last tax year they relate to. If you pay staff, the payroll remittance calculator covers source deductions, which run on their own schedule. GST/HST is separate too. Once taxable sales pass $30,000 in a single calendar quarter or over four quarters in a row, you must register, and a clean T2125 does not cover it. Our GST, HST and PST guide explains the pieces, and the page on which form to file for business taxes goes step by step through the penalties and records.
Sources and what we checked
We checked the figures and rules on this page against the official pages below in November 2026. This is an independent information page with no connection to the CRA or any government.
- CRA: 2027 tax deadlines for businesses and self-employed individuals
- CRA: Corporation income tax return (T2)
- CRA: Interest and penalties on late taxes (personal)
- CRA: Due dates and payment dates for individuals
- CRA tax tip: Self-employed? Make filing easier
Frequently asked questions
Which form does a sole proprietor file?
Form T2125, the statement of business or professional activities, goes in with your personal T1 return. You need one T2125 for each separate business or professional activity. Your net business income is added to your other income and taxed at personal rates, and CPP on self-employed earnings is calculated on the same return.
When is the self-employed deadline?
For the 2025 tax year you had to file by June 15, 2026, and tax owing was due April 30, 2026. The CRA has not posted 2026 tax year dates yet; the usual pattern gives June 15, 2027 to file and April 30, 2027 to pay. Instalments fall on March 15, June 15, September 15 and December 15.
Does a corporation with no income still file?
Yes. Every resident corporation files a T2 each year, even if it is inactive or owes no tax. The CRA lists only a few exceptions, such as tax-exempt Crown corporations, Hutterite colonies and registered charities. Most corporations must file electronically, and a required electronic filer who does not can face a $1,000 penalty.
When is a corporation's return due?
Within six months of its tax year end. The tax itself is generally due two months after year end, or three months for a Canadian-controlled private corporation claiming the small business deduction when the conditions are met. A December 31 year end means filing by June 30 but paying earlier.
What is the late-filing penalty on a business return?
On a personal return with tax owing, it is 5% of the balance plus 1% for each full month late, up to 12 months. A repeat offender rate of 10% plus 2% a month, up to 20 months, applies after an earlier penalty and a demand to file. Corporations face the same 5% and 1% basis.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST