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A business tax return depends on the structure. A sole proprietor reports on the personal return, due June 15, 2027 for 2026, with tax owing due April 30. A corporation files a T2 within six months of year end but pays its tax after two or three months, so plan cash for that earlier date.
Which return does a business file?
People say business tax return for different documents, so sort out yours first.
| How the business runs | Return | Filing date |
|---|---|---|
| Sole proprietor | Personal T1 with business income (form T2125) | June 15, 2026 for 2025, June 15, 2027 for 2026. Balance due April 30 both years |
| Corporation | T2 Corporation Income Tax Return | Six months after the tax year ends |
The CRA says that if you or your spouse ran a business in 2025, you had until June 15, 2026 to file, though tax owing was still due April 30. For the 2026 return the CRA has not posted dates yet, and the usual pattern gives the same pair: June 15, 2027 and April 30, 2027. We have not covered partnership returns here. For the forms themselves and a year calendar, see business income tax return: T2125 or T2.
When is a corporation's return due, and when is the tax due?
File within six months of each tax year end. A March 31 year end means September 30. A year end of September 23 means March 23. If the date falls on a weekend or holiday, a return sent the next business day counts as on time. Even a corporation that owes nothing files: the CRA's corporation income tax return page says resident corporations file a T2 every tax year even if no tax is payable.
Paying runs on a different clock. The balance is generally due within two months of year end, or three months for a Canadian-controlled private corporation (CCPC) that meets the conditions for the small business deduction.
| Year end | T2 filing date | Balance due (2 months) | Balance due (3 months, qualifying CCPC) |
|---|---|---|---|
| December 31, 2025 | June 30, 2026 | February 28, 2026 | March 31, 2026 |
| December 31, 2026 | June 30, 2027 | February 28, 2027 | March 31, 2027 |
So a corporation with a December 31 year end can file in June and still owe money in February or March. That gap surprises new owners more than anything else. Treat the tax as a bill that arrives months before the paperwork does. Most corporations also pay instalments through the year if their tax is above $3,000, due monthly or quarterly depending on their situation.
What does the tax look like for a sole proprietor?
Take $80,000 of net business income in Ontario. The self-employed tax calculator shows income tax of $13,233.57 and CPP of $8,892.90, for $22,126.47 in total. You keep $57,873.53. CPP is high because a self-employed person pays both halves.
The tool leaves out EI, GST/HST and your business expenses. Enter net income, meaning after expenses. If you pay quarterly, the tax instalments calculator splits the year into payments.
A habit that helps: of every $100 of net income at this level, set aside about $27.66 for tax and CPP and leave the rest in the account you spend from. Your own percentage will differ, so rerun the calculator when your income changes.
What does the tax look like for a corporation?
Try $300,000 of active business income for a CCPC in Ontario. The corporate tax calculator shows $35,088 of combined tax, an average of 11.7%, which leaves $264,912 in the company. Treat the Ontario rate as approximate. Ontario cut its small business rate on July 1, 2026, and the tool uses a prorated blend for the calendar year, so the exact rate depends on your year end.
Money you take out is a separate matter. A salary or dividend triggers personal tax on top, and this figure does not include it. Compare options with the dividend tax calculator before you decide how to pay yourself, and see corporation tax rates in Canada for 2026 for the rates behind the example.
Which mistakes cost business owners money?
Mixing personal and business spending is the classic one. It makes the return harder to prepare and harder to defend. Filing late is another. A corporation's late-filing penalty is 5% of the unpaid tax at the deadline plus 1% for each full month late, up to 12 months. It rises to 10% plus 2% a month, up to 20 months, if a demand to file and an earlier penalty came in the last three years. For $10,000 unpaid and a return four full months late, that is $500 plus $400, or $900, before interest.
Next, forgetting that filing and paying are separate dates. Set money aside when you earn it. A separate bank account for tax is dull advice, and it works. Last, expecting a refund late: a corporation must file within three years after the tax year end to receive a refund.
Do you need an accountant?
For a sole proprietor with simple books, software usually does the job. For a corporation, many owners hire an accountant, because the return has many schedules and the rules on paying yourself matter. That is an opinion, not a CRA rule. Whoever does the filing, it is your signature and your deadline, so ask for the figures a few weeks early and read them. Our page on choosing a tax specialist lists questions to ask.
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: Avoiding penalties (corporations)
- CRA: T2 Corporation guide, before you start
- CRA: Due dates and payment dates for individuals
Frequently asked questions
When is a business tax return due in Canada?
A sole proprietor's 2025 return was due June 15, 2026, with tax owing due April 30, 2026. For the 2026 return the CRA has not posted dates yet; the usual pattern gives June 15, 2027 and April 30, 2027. A corporation files its T2 within six months of its tax year end, and pays earlier.
Is the tax payment due when the return is due?
Not for a corporation. The balance is generally due two months after year end, or three months for a qualifying Canadian-controlled private corporation. A December 31 year end means paying by February 28 or March 31, but filing by June 30. For a sole proprietor, tax is due April 30 and the return June 15.
Do sole proprietors file a separate business return?
No. The business income and expenses go on form T2125, which is filed with the personal T1 return. That is why the personal filing dates apply, including June 15 for self-employed filers. Each separate business or professional activity gets its own T2125, and CPP on the net income is worked out on the same return.
Can a corporation claim a refund late?
Only within limits. A corporation must file its return no later than three years after the end of the tax year to receive a refund, according to the CRA. A refund you do not claim inside that window is lost, so file on time whenever you expect money back from the CRA.
What is the late-filing penalty for a corporation?
The penalty is 5% of the unpaid tax at the filing deadline plus 1% of that tax for each full month the return is late, up to 12 months. If the CRA demanded a return and assessed a late penalty in any of the three previous years, the rate is 10% plus 2% a month, up to 20 months.
What is the Ontario small business rate for 2026?
Ontario changed its small business rate on July 1, 2026, so our calculator uses a prorated blend for a calendar year. That blend is our own derived figure, not a published rate. A corporation with a different year end gets a different result, so check the Ontario government page for your year.
- 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