The T2 Deadline Isn't One Date: Filing vs Payment Clocks Explained
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A corporation's T2 return is due six months after its fiscal year-end. The tax payment runs on a separate clock: most Canadian-controlled private corporations claiming the small business deduction must pay their balance within three months of year-end, other corporations within two. Filing on time is not paying on time.
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The six-month filing rule
Six months after the end of the tax year. Where the year-end is the last day of a month, the return is due the last day of the sixth following month; otherwise the same day of the sixth month. A December 31 year-end files by June 30; a March 31 year-end files by September 30.
The two- and three-month payment rules
The balance of tax is generally due two months after year-end. Eligible Canadian-controlled private corporations claiming the small business deduction get three months, subject to income conditions. Interest runs from that date, not from the filing date.
Worked examples across different year-ends
A December 31 CCPC: balance due March 31, return due June 30. A June 30 CCPC: balance due September 30, return due December 31. A September 30 non-CCPC: balance due November 30, return due March 31. The gap between the two dates is where firms lose money for clients.
Instalments: the third clock
Corporations with total tax payable over $3,000 in the current or previous year pay monthly instalments, due the last day of each month. Eligible small CCPCs with a clean compliance history may pay quarterly instead.
Why staggered year-ends mean T2 season never ends
A corporation picks its own year-end on its first T2. A firm with 80 corporate clients therefore has filing and payment dates in every month of the year, which is why a corporate practice cannot be run as a season.
Penalties and interest when either clock is missed
Late filing costs 5% of the unpaid tax plus 1% per complete month, to a maximum of 12 months, rising to 10% plus 2% per month for up to 20 months on repeated failure. Late payment attracts compound daily interest at the prescribed rate from the balance-due date.
Tracking both clocks across a client list
Hold them as two separate obligations on the client record, both derived from the fiscal year-end. Tracking only the six-month date means the payment deadline passes while the file still looks on schedule.
Frequently asked questions
When is the T2 return due in Canada?
Six months after the corporation's fiscal year-end. Where the year-end is the last day of a month, the return is due on the last day of the sixth following month. A December 31 year-end files by June 30.
Is the corporate tax payment due at the same time as the T2?
No. The balance of tax is generally due two months after year-end, or three months for eligible Canadian-controlled private corporations claiming the small business deduction. The return is due at six months, so the two obligations must be tracked separately.
What happens if the T2 is filed on time but paid late?
There is no late-filing penalty, but compound daily interest accrues on the unpaid balance from the payment due date at the CRA's prescribed rate. Clients are frequently surprised by this because they associate the six-month date with both obligations.
Does a corporation with no tax payable still have to file?
Yes. Every resident corporation must file a T2 for every tax year, even where no tax is payable. Not filing invites a demand to file, which unlocks the higher repeated-failure penalty tier on any future balance.
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