How to file your return

How to file your return

Using tax preparation software

Over 90% of corporations file their return electronically. To do so, you must use CRA-certified software. The CRA certifies commercial software to ensure that it meets the CRA's specifications. To find a list of certified software, visit Canada.ca and search for "certified software corporations."

A return prepared by certified software can then be electronically filed using:

• the CRA's Corporation Internet Filing service

• My Business Account, at canada.ca/my-cra-business-account, if you are a business owner

• Represent a Client, at canada.ca/taxes-representatives, if you are an authorized representative or employee

If you cannot file electronically, you can print the T2 Bar Code Return and mail it to the CRA.

If you file through an electronic transmitter, you have to authorize the transmitter by completing Form T183 CORP, Information Return for Corporations Filing Electronically, for each tax year. As of June 22, 2023, Form T183CORP may be signed with an electronic signature.

Do not send this form to the CRA, but keep it in case the CRA asks for it later.

T2 Auto-fill

T2 Auto-fill is a secure service that lets corporations and authorized representatives download information from the CRA to their tax preparation software. Using this service will ensure that certain return and account balances will match CRA's data. For more information on what T2 Auto-fill delivers, go to canada.ca/auto-fill-my-t2-return.

This service is not mandatory for certified software products. Some include it and others do not. If you have questions on the availability of the service, contact the software product company.

Mandatory electronic filing

All corporations with annual gross revenue of more than $1 million had to file their T2 return electronically, except for insurance corporations, non-resident corporations, corporations reporting in functional currency, and corporations that are exempt from tax payable under section 149 of the Income Tax Act.

This $1 million threshold was eliminated for tax years starting after 2023. Most corporations have to file their return electronically.

Corporations that do not file their returns electronically when required are subject to a penalty. For more information, see page 16.

References
Subsection 150.1(2.1)
Regulation 205.1(2)

Corporation Internet Filing

You must use CRA-approved software that has been certified for Corporation Internet Filing. By filing electronically, you will receive immediate confirmation that the CRA has received your return, enjoy faster processing and refunds, save on mailing costs, and help the environment by using less paper.

The T2 Attach-a-doc service allows corporations to attach supporting documentation such as certificates when they file their T2 return or within 24 hours of filing. This service is not mandatory for certified software products. Some include it and others do not. If you have questions on the availability of the service, contact the software product company.

If you are filing your T2 return electronically, and you cannot use the T2 Attach-a-doc service to file your supporting documents with your return, send them to your tax centre (see "Where to file your paper return" on page 13).

When sending paper documents, clearly identify your corporation's name, business number, and the applicable tax year-end on the documents.

If you are filing an election that does not have a prescribed form or prescribed manner, include it with the notes to your financial statements on the General Index of Financial Information (GIFI) to transmit the election electronically with your return, unless otherwise stated on a T2-related form.

For an up-to-date list of all special elections and returns that can be e-filed using commercial tax preparation software, go to canada.ca/cra-special-elections-and-returns.

For information on your eligibility, available software, and more, go to canada.ca/corporation-internet.

Filing without a web access code

You can file corporation returns online without a web access code using "Transmit a return" through:

• My Business Account at canada.ca/my-cra-business-account, if you are the business owner

• Represent a Client at canada.ca/taxes-representatives, if you are an authorized representative or employee

North American Industry Classification System (NAICS) codes

All certified tax preparation software for T2 returns uses self-identified NAICS codes.

NAICS codes are hierarchical numerical codes designed to provide common definitions and descriptions of our industries and business activities. NAICS codes are up to six digits long. The Government of Canada as well as the governments of the provinces and territories use the data provided by NAICS codes for economic analysis and fiscal policy responses.

The integration of NAICS codes into T2 commercial tax preparation software packages means that corporations have to pick their main revenue-generating business activity directly from a drop-down list or a simple search. Active corporations that file their T2 returns either by Internet or on paper using 2D bar codes must choose the appropriate codes to describe their main revenue-generating business activity.

Corporations using the return available on Canada.ca do not have to enter a NAICS code.

Avoid errors

It is important that you select the most accurate business activity the first time, since the first year's code is carried forward to following years, allowing for a simple validation of the description when there is no change in the main business activity.

If you do not select the business activity, problems and errors will result when you prepare the T2 return to be transmitted electronically or printed in bar-coded format.

If you have any questions on selecting NAICS codes to describe your corporation's main revenue-generating business activity when filing your T2 return, call the Business Enquiries line at 1-800-959-5525.

Using the returns available on Canada.ca

Electronic filing of the return results in the quickest processing time, with 95% of notices of assessment issued within six weeks. For information on processing times, go to canada.ca/cra-processing-times.

If you do not have to file electronically, the CRA has two types of corporation return available for printing.

T2 Corporation Income Tax Return

The T2 Corporation Income Tax Return has nine pages. Any corporation can use it.

T2 Short Return

The T2 Short Return is two pages plus a Schedule 1, Net Income (Loss) for Income Tax Purposes. To complete the T2 Short, you may also have to complete a Schedule 8, Capital Cost Allowance (CCA) and a Schedule 50, Shareholder Information. The T2 Short Return is a simpler version of the T2 Corporation Income Tax Return. Two categories of corporations are eligible to use this return:

• You can use this return if the corporation is a Canadian-controlled private corporation (CCPC) throughout the tax year and this year, it has either a nil net income or a loss for income tax purposes.

• You can also use this return if the corporation is exempt from tax under section 149 (such as a non-profit organization).

In addition, the corporation must meet all of the following conditions to use this return:

• it has a permanent establishment in only one province or territory (see page 98)

• it is not claiming any refundable tax credits (other than a refund of instalments it paid)

• it did not receive or pay out any taxable dividends

• it is reporting in Canadian currency

• it does not have an Ontario transitional tax debit

• it does not have an amount calculated under section 34.2

If the corporation does not fit into either of the above categories or does not meet all of the above conditions, file a regular T2 return.

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