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A T2 corporation income tax return is due six months after your corporation’s year end, and it has to be filed every year, even when the company earned nothing and owes nothing. The tax itself is due sooner, usually two months after year end.
Who has to file a T2 corporation income tax return?
Almost every corporation. The CRA says even inactive companies and non-profit corporations file for every tax year, with a short list of exceptions such as registered charities. Its corporation income tax return page says the same thing about companies with no tax payable. If you incorporated last spring and never sold a thing, the return is still yours to file.
Since tax years starting after 2023, the return goes in electronically. The CRA can charge a $1,000 penalty when a corporation that has to file online doesn’t. Paper is mostly gone, so plan on tax software or an accountant who files for you.
When are the deadlines?
Two dates matter, and people mix them up all the time. The filing date is six months after the year end. The payment date is two months after it, or three months for a Canadian-controlled private corporation that meets the CRA’s conditions for the small business deduction.
| Item | Rule |
|---|---|
| Return due | 6 months after year end |
| Balance of tax due | 2 months after year end (3 months for some small companies) |
| Late filing penalty | 5% of unpaid tax, plus 1% for each full month late, up to 12 months |
| Repeat late filers | 10% of unpaid tax, plus 2% for each full month late, up to 20 months |
| Federal general rate | 15% |
| Federal small business rate | 9% on the first $500,000 |
Paying late costs interest on top of the penalties, and the CRA’s page doesn’t give one rate to quote. Check the current prescribed rate before you plan around it.
What do the dates look like for a real year end?
Take a corporation with a December 31, 2026 year end. The return is due June 30, 2027. The balance of tax is due February 28, 2027, or March 31, 2027 if the company qualifies for the three-month rule. That’s four months of gap between paying and filing, and it’s where a lot of new owners get caught.
A company with a June 30 year end shifts everything. The return is due December 31 and the tax is due August 31, or September 30 for the small-company rule. Pick your year end on purpose when you incorporate, because it sets your whole calendar for years.
What does a late return cost?
Take an Ontario company with $300,000 of active business income. The corporate tax calculator puts its 2026 tax at $35,088, made of $27,000 federal and $8,088 provincial. Say none of it was paid by the deadline and the return is six full months late.
The penalty is 5% plus 6%, so 11% of $35,088. That’s $3,859.68, before any interest. A company that pays on time and files a month late would owe 6% instead, about $2,105. The lesson is a plain one: pay by the payment date even if the return isn’t ready, because the penalty grows on the unpaid part only.
Treat the $35,088 as a ballpark. Ontario cut its small business rate on July 1, 2026, so a calendar 2026 year uses a prorated blend that the CRA doesn’t publish as one number. A company with another year end will come out differently.
What if the company really has nothing to report?
File anyway. The percentage penalties in the table are worked out on unpaid tax, so a nil return has little to multiply, but that’s no reason to skip it. The return is still required, and a pattern of missed years is the kind of thing that makes a company’s file look careless. Most owners find a dormant year takes far less time than an active one.
What goes wrong with T2 returns?
The first mistake is treating a dormant company as exempt. It isn’t. The second is forgetting that the small business rate has a ceiling. On $600,000 in Ontario, the same calculator shows $84,980, an average rate of 14.2%, because the amount above $500,000 is taxed at the higher combined rate. Companies that share the limit with related corporations, or that hold a lot of capital or passive investment income, can lose part of it. The calculator ignores those cases.
Third, owners forget that the company’s tax isn’t the end of it. Money you pull out as salary or dividends is taxed again in your hands. The dividend tax calculator and the self-employed tax calculator show that side, and the payroll remittance calculator covers what you owe the CRA when you pay yourself a salary.
What this page is based on
Deadlines, penalties and the federal rates come from the CRA‘s T2 Corporation Income Tax Guide and its corporation pages, read in September 2026. Provincial rates and the Ontario change come from CRA provincial pages. Quebec lowers its small business rate from 3.2% to 2.2% for tax years beginning after 29 April 2026, according to a Revenu Quebec page. Nothing here is affiliated with the CRA.
Frequently asked questions
Do I file a T2 if my corporation had no income?
Yes. The CRA requires a T2 for every tax year, including inactive corporations with no tax payable.
Can I file my T2 on paper?
For tax years starting after 2023 most corporations must file electronically, and the CRA can charge a $1,000 penalty if they don't.
What is the penalty for filing a T2 late?
It's 5% of the unpaid tax plus 1% for each full month late, up to 12 months. Repeat offenders face 10% plus 2% a month.
When do I have to pay the tax?
Two months after year end for most corporations. Some small Canadian-controlled private corporations get three months.
Does filing late cost less if I already paid?
Yes, because the penalty is worked out on unpaid tax. Paying on time keeps it small even when the return is late.
- Self-employed taxes in Canada: income, CPP and GST
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