Your First T2 Corporate Tax Return: What’s Due and When
Published: October 2, 2026 · Last updated: October 2, 2026
You incorporated. Somewhere in the paperwork a fiscal year end got picked, maybe June 30, maybe the last day of the month you incorporated in, and nobody sat you down and explained what that date does. It does almost everything. Every deadline your corporation has runs from your year end, not from April 30 and not from December 31.
There are two dates, not one. The corporate tax return is due six months after your year end. The tax itself is due two months after, or three months for some small corporations. That gap is where first-time corporate filers lose money, because you can file perfectly on time and still be charged interest for four months.
Bottom Line Up Front
- Your deadlines count from your fiscal year end, a date you chose, not from a fixed calendar date.
- The T2 return is due six months after year end (CRA, 2025).
- The tax balance is due two months after year end, or three for a Canadian-controlled private corporation meeting set conditions (CRA, 2025). Filing on time does not stop interest.
- Every resident corporation files a T2 every year, including one with no income and one that did nothing at all.
- Late filing costs 5% of the unpaid tax plus 1% per complete month, to a maximum of 12 months (CRA, 2025).
On this page
- Your deadlines start at your year end
- Two deadlines, not one
- Who has to file a T2
- A worked timeline: a June 30 year end
- When instalments start
- What late actually costs
- What your accountant needs from you
- The other filings on the same calendar
- If you are already late
- Common Questions
Your deadlines start at your year end
A corporation’s tax year is its fiscal period, and it can run up to 53 weeks, or 371 days (CRA, 2025). You set it when you file your first T2, using your date of incorporation as the start. Once it is set, it stays the same year to year unless CRA approves a change.
So there is no single corporate tax deadline in Canada. There is yours. A March 31 year end and an October 31 year end produce completely different calendars, and neither cares what happens on April 30.
Two mechanical rules matter. A month-end year end is due the last day of the sixth month after. Any other day is due the same day of the sixth month after. CRA’s own examples: March 31 is due September 30, and September 23 is due March 23 (CRA, 2025).
Write your year end at the top of your bookkeeping file and work backwards. If you are still deciding, choosing a year end is worth a conversation before that first return goes in.
Two deadlines, not one: filing and paying
The return and the money run on different clocks. The T2 is due six months after year end. The balance of tax is due two months after the end of the tax year for most corporations (CRA, 2025). That is a four-month gap in which you can be fully compliant on filing and still accumulating interest.
Some Canadian-controlled private corporations (CCPCs) get an extra month, making the balance due three months after year end. CRA sets out the test as conditions 1 and 2, plus either 3 or 4:
| # | Condition | Applies |
|---|---|---|
| 1 | The corporation is a CCPC throughout the tax year | Required |
| 2 | It claimed the small business deduction for the current or previous tax year | Required |
| 3 | Its taxable income for the previous tax year does not exceed its business limit for that year | If not associated with another corporation during the year |
| 4 | The total taxable incomes of all associated corporations for their last tax year ending in the previous calendar year do not exceed the total of their business limits | If associated |
Source: CRA, balance-due day, 2025. Taxable income here is measured before specified future tax consequences, such as loss carrybacks.
The business limit for 2025 is $500,000 and the federal rate on income qualifying for the small business deduction is 9% (CRA, 2025). That limit changes by legislation, so confirm the current figure.
One wrinkle for a new corporation: in a first tax year there is no previous tax year to test under conditions 3 and 4. If you are not certain the three-month date applies, treat the two-month date as your deadline. Paying early costs nothing. Paying late costs daily compound interest.
Who has to file a T2
Every resident corporation files, every year, income or not. CRA’s wording is direct: all resident corporations, other than tax-exempt Crown corporations, Hutterite colonies and registered charities, have to file a T2 every tax year even if there is no tax payable (CRA, 2025). That covers non-profit organizations, tax-exempt corporations and inactive corporations.
This catches people who incorporated, never got the business going, and assumed the company quietly went away. It did not. A nil return is quick when the books are clean, and if the corporation has no future, the answer is to wind it up properly rather than stop filing.
A worked timeline: a June 30 year end
Take a corporation incorporated July 1, 2024 that chose June 30, 2025 as its first year end. It is a CCPC claiming the small business deduction. This is an illustration using the rules in effect for the 2025 tax year.
| Date | What is due | Rule |
|---|---|---|
| June 30, 2025 | First tax year ends | Year end set on the first T2 |
| July 31, 2025 | First monthly instalment for the next tax year, if required | One month less a day from the start of the tax year |
| August 31, 2025 | Tax balance for the year ended June 30, 2025, if the three-month extension does not apply | Two months after year end |
| September 30, 2025 | Tax balance if the CCPC conditions are met; first quarterly instalment for the next year, if eligible | Three months after year end; one quarter less a day from the start of the tax year |
| December 31, 2025 | T2 return for the year ended June 30, 2025 | Six months after year end |
| December 31, 2025 | Ontario annual return | Six months after fiscal year end |
| February 28, 2026 | T4 and T5 slips for calendar 2025 | Last day of February |
Two things to notice. The money was due in August or September, so a corporation that waits until December to work out what it owes has been paying interest for months. And the first instalment for the second tax year can fall due before the first year’s balance has been paid.
August 31, 2025 was a Sunday. When a due date falls on a Saturday, Sunday or a CRA-recognized public holiday, payment is on time if CRA receives it by the next business day, and the same rule applies to filing (CRA, 2025).
When your corporation starts paying instalments
New corporations get a break in year one. You do not have to make instalment payments until you have started your second year of operation (CRA, 2025). The first year’s tax is still due in full on the balance-due day, so the relief is from the monthly payments, not from the tax.
There is also a size threshold. No instalments are required if total taxes payable under Parts I, VI, VI.1 and XIII.1, plus provincial and territorial tax CRA administers, is $3,000 or less for either the current or the previous tax year (CRA, 2025).
Instalments are monthly by default: the first is due one month less a day from the start of your tax year, the rest on the same day each month after (CRA, 2025).
A small CCPC can pay quarterly instead. CRA requires all of the following at the time the payment is due (CRA, 2025):
- It has claimed the small business deduction for the current or previous tax year.
- Taxable income, with associated corporations, is $500,000 or less for the current or previous tax year.
- Taxable capital employed in Canada, with associated corporations, is $10 million or less for the tax year.
- It has a perfect compliance history over the previous 12 months: GST/HST, payroll withholdings, CPP and EI all remitted on time, and every required return filed on time.
That last one is what small corporations lose. A single late HST remittance can push you back to twelve payments a year instead of four.
What late filing and late payment actually cost
The late-filing penalty on a T2 is 5% of the unpaid tax due on the filing deadline, plus 1% of that unpaid tax for each complete month the return is late, to a maximum of 12 months (CRA, 2025).
There is a bigger penalty for repeating it. If CRA issued a demand to file for the current year and assessed a failure-to-file penalty in any of the three previous tax years, it becomes 10% of the unpaid tax plus 2% for each complete month late, to a maximum of 20 months (same CRA source, 2025).
Interest is separate and does not wait for the return. Arrears interest compounds daily on any unpaid balance from the balance-due day to the date of payment, at CRA’s prescribed rate (CRA, 2025). For the third calendar quarter of 2026 that rate is 7% (CRA, 2026), and it resets quarterly.
Worked example, 2025 tax year. A corporation with a June 30, 2025 year end owes $12,000 of tax and files its T2 on April 30, 2026, four complete months past the December 31, 2025 deadline.
| Component | Calculation | Amount |
|---|---|---|
| Base late-filing penalty | 5% × $12,000 | $600 |
| Monthly penalty | 1% × $12,000 × 4 months | $480 |
| Total penalty | $1,080 | |
| Arrears interest | Daily compound on $12,000 from the balance-due day to the date paid | Additional |
The penalty alone is 9% of the tax bill, and none of it exists if the return goes in on December 31 and the money on August 31 or September 30.
Not sure which of these dates is yours? Ruby Tax has been preparing corporate returns from North York for over ten years, and you talk to the person doing the work, not an account manager. Get a free quote or call 647-990-7258.
What your accountant needs from you
A first T2 goes badly when the books arrive as a shoebox in month five. Financial statement information has to be reported using CRA’s General Index of Financial Information (GIFI) codes (CRA, 2025), so your activity has to become a real balance sheet and income statement first. The practical list:
- Bank and credit card statements for the full fiscal year, every account in the corporation’s name.
- Books closed and reconciled to those statements. If they are not, that work happens first and it is what eats the timeline. Current bookkeeping is the biggest single factor in how fast a T2 gets done.
- HST returns already filed for the periods inside the fiscal year, with amounts remitted.
- Payroll records and T4s, if the corporation paid salary or a bonus.
- Invoices for major purchases: equipment, vehicles, anything being capitalized.
- Prior year T2 and notice of assessment, if this is not year one.
- Minute book changes: shares issued, directors added or removed, dividends declared.
- Shareholder transactions: money you put in, money you took out, and which it was. This is where the questions and the reassessment risk live.
Keep the underlying records too: business records have to be kept for six years from the end of the last tax year they relate to (CRA, 2026).
The other filings on the same calendar
The T2 is not the only thing your corporation owes, and the rest does not follow your year end.
T4 and T5 slips are calendar-year filings, both due the last day of February following the calendar year they cover (CRA, 2025). Salary to yourself means a T4. A dividend means a T5. Neither waits for your fiscal year end, and both are easy to miss in year one.
GST/HST returns run on their own reporting period. Monthly and quarterly filers file and pay one month after the end of the reporting period. Annual filers generally have three months after their fiscal year end (CRA, 2025). A late remittance is also what costs a small CCPC its quarterly instalment eligibility, so staying current on HST pays for itself twice.
The Ontario annual return is a corporate filing, not a tax return, and CRA does not collect it. Ontario corporations file it through the Ontario Business Registry within six months of their fiscal year end (Government of Ontario, 2026). It shares the T2’s six-month date, which makes it easy to pair with the return and easy to miss entirely.
If you are already late
Late is solvable, and it gets more expensive the longer you look away. The monthly late-filing charge is capped at 12 months. Arrears interest compounds daily with no cap.
- File now and pay what you can. Filing stops the monthly penalty growing and removes the risk of a demand to file and the larger repeated-failure penalty later.
- Set up a payment arrangement if you cannot pay in full. CRA lets you schedule payments in your online account by pre-authorized debit (CRA, 2026).
- Ask for relief where the facts support it. Where events beyond your control prevented you from meeting your obligations, CRA may grant relief of penalties and interest (CRA, 2026). This is discretionary, not a guaranteed outcome.
If the problem is bigger than one late return, the Voluntary Disclosures Program may apply. Among other conditions, you have to apply before an audit or investigation has started, the information has to be at least one year past its filing due date, and you have to include payment of the estimated tax owing or request a payment arrangement (CRA, 2026). Order matters: a disclosure made after CRA contacts you is generally too late. The same goes for outstanding personal returns and late HST returns, which usually sit in the same file.
Common Questions
Can I change my corporation’s year end?
Generally the tax year stays the same from year to year unless CRA approves a change, with exceptions such as a change of control (CRA, 2025). Far easier to choose well on the first return than to change it on the third.
My corporation had no activity at all. Do I still file?
Yes. Inactive corporations are specifically included, and a resident corporation files every tax year even with no tax payable (CRA, 2025).
What if I file on time but pay late?
You avoid the late-filing penalty and still pay arrears interest, compounded daily from the balance-due day until the balance is cleared. That is the two-versus-six-month gap doing its damage.
When does my business number arrive after incorporating?
Within 45 days of incorporation you should receive a notice confirming your business number (CRA, 2026). You need it before you can file or pay anything.
What to do this week
Find your year end, then write down the two dates it produces: plus two or three months for the money, plus six months for the return. Put both in a calendar with a reminder six weeks ahead of each, because six weeks is roughly what a clean first T2 takes from handing over the books to filing. Then add the end of February for slips and your own HST period dates.
If your first year end has passed and you are not sure where you stand, spend an hour on it now rather than a penalty calculation later. That is also why filing should come first even when the numbers are ugly.
About the author
Raj is the principal of Ruby Tax, a CRA e-file certified tax and accounting practice at 250 Consumers Road in North York. He has spent over ten years preparing personal and corporate returns for clients across Canada, from first-time filers to incorporated businesses and franchise operators, including a steady run of first corporate year ends.
This article is general information, not tax advice for your situation. Tax rules change and the right answer depends on your facts. Confirm anything here against current CRA guidance or talk to us before you act on it.
