Updated Checked by the Tax-Services.ca editorial team How we check
A corporation income tax return (the T2) is due six months after the end of your tax year, and it’s due even if the company owes nothing or sat idle all year. For a December 31 year end that means June 30 of the following year. The tax itself is usually due sooner than the return, which surprises a lot of new owners.
When is a corporation income tax return due?
The CRA sets the filing date at six months after year end. If your year ends on the last day of a month, you file by the last day of the sixth month after it. A year that ends on March 31 gives you September 30. A year that ends August 31 gives you February 28.
File your return within six months of the end of each tax year.
When to file your corporation income tax return, canada.ca
The payment date is different. The balance of tax is due two or three months after year end, and which one applies depends on the company. We couldn’t confirm the exact conditions for the three-month date on a page we could read in full, so check the CRA’s balance-due page for your year before you count on the extra month.
The dates above follow the 2025 tax year rules. The CRA hasn’t published its dates for 2026 tax years yet, so check them again when they appear.
Who has to file one?
Every resident corporation files a T2 each year. That includes inactive companies, non-profits and corporations with no tax to pay. Only a short list is exempt, such as registered charities and tax-exempt Crown corporations.
Say Priya incorporated her design studio in the spring, landed two clients and then took a full-time job in the fall. The company earned a little, spent a little and has been sitting quiet since. It still files. A dormant company with a zero balance owes a return, and the late penalty is figured on unpaid tax, so a zero-tax year is the cheapest one to get right.
Since tax years starting after 2023, you file the T2 electronically. Miss that and the CRA can charge a $1,000 penalty, with a few exceptions such as insurance and non-resident corporations. Paper is basically over for a normal small company.
What does a late corporation income tax return cost?
The penalty is 5% of the tax that was unpaid on the filing deadline, plus 1% of that amount for every full month the return is late, up to 12 months. Take an Ontario company that owes $17,544 (a $150,000 profit at the small business rate, worked out with our corporate tax calculator) and files four full months late. The penalty is 9%, so $1,579. Wait the full 12 months and it’s 17%, about $2,982. Interest comes on top, and we didn’t work out that figure.
Repeat offenders pay more. If the CRA demanded a return and charged a failure-to-file penalty in any of the three previous years, the rate doubles to 10% plus 2% a month, for up to 20 months.
| Situation | Penalty on unpaid tax | Cap |
|---|---|---|
| First late return | 5% plus 1% per full month | 12 months |
| Repeat after a demand and penalty in the last 3 years | 10% plus 2% per full month | 20 months |
| Required e-filing skipped | $1,000 | None stated |
The penalty only bites on tax that was still unpaid at the deadline. That’s the quiet reason to pay on time even if the return itself isn’t ready: money already sent in shrinks the base the penalty is figured on.
What goes into the return?
Your accountant starts from the year-end financial statements. The CRA asks for them in a coded format (the General Index of Financial Information), and Schedule 1 then turns book profit into taxable income. A few adjustments show up in almost every file: meals, depreciation replaced by capital cost allowance, and reserves.
Other schedules appear only when something applies. Schedule 8 covers capital cost allowance, Schedule 50 lists shareholders, and Schedule 23 shares the small business limit between related companies. Our T2 incorporated return guide goes through them.
What if you’ve missed a year or two?
File the oldest one first and don’t wait until the whole stack is perfect. The 1% a month keeps running while you tidy up, and the repeat-offender rate is the one that really stings. If the CRA has already sent a demand letter for a return, treat the due date on it as firm. It’s also the thing that makes any later late return cost double, so it’s worth a phone call to your accountant the same day.
Mistakes that cost money
Waiting for the filing date to pay is the big one. Tax owing is due earlier, so interest may already be running when you file on time.
Another one: forgetting related companies. Two corporations under common control share one $500,000 small business limit, so each doesn’t get a full one. And a personal expense paid from the company account doesn’t disappear. It turns into a shareholder loan or a taxable benefit, and that needs sorting out before you file.
The company’s tax is also only the first layer. What you pay yourself is taxed again, so try the dividend tax calculator before you decide between salary and dividends. If you have staff, the payroll remittance calculator covers a separate obligation.
How we checked the figures
Due dates, the electronic filing rule and the penalty rates come from Canada Revenue Agency pages on corporation returns and penalties, read in September 2026. The Ontario example uses this site’s corporate tax calculator, where the 2026 small business rate is a blend we derived, not a published figure. This is an independent guide, separate from any government body. Check your own dates on the official pages.
Frequently asked questions
Do I file a T2 if my corporation did nothing this year?
Yes. Inactive corporations still file every year, even with no tax to pay.
Can I file the T2 on paper?
For tax years starting after 2023, most corporations must file electronically. The CRA can charge $1,000 if they don't.
What is the late filing penalty?
5% of the tax unpaid on the deadline, plus 1% for each full month late, up to 12 months.
When is the tax due, not just the return?
Two or three months after year end. Check the CRA balance-due page to see which applies to your company.
How far back can I file to get a refund?
The CRA says you must file no later than three years after the end of the tax year to receive a refund.
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