Income Tax Returns - the T2 Corporate Income Tax Return and the T2 Short Return

Act: Income Tax Act, R.S.C. 1985, c. 1, 5th Supp.
Regulation: Not applicable.

To Whom Does This Apply?

Under the Income Tax Act, all corporations have to file a T2 or T2 Short return, even if there is no tax payable. This includes non-profit organizations*, tax-exempt corporations and inactive corporations. The only exception to this rule is a corporation that was a registered charity throughout the year.  

Summary

Internet Publications

T2 Corporation Income Tax Return

T4012 Corporation - Income Tax Guide

The T2 Corporation Income Tax Return is an eight-page return that serves as a federal and provincial/ territorial corporation income tax return.

Exceptions: corporations located in Quebec, Ontario or Alberta. If the corporation is located in one of these provinces, it has to file a separate provincial corporate return.

• The T2 Short is a two-page return plus a schedule 1, schedule 8 and a schedule 50, designed for small, non-taxable corporations with a gross annual income of $500 000 or less. The T2 Short return is a simpler version of the T2 Corporation Income Tax Return. Two categories of corporations are eligible to use the T2 Short.

First category:
Corporations that meet all of the following conditions:

• it is a Canadian-controlled private corporation (CCPC);
• it has either a nil net income or a loss for the taxation year;
• it has a permanent establishment in only one province or territory;
• 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.

Second category:
Tax-exempt corporations, (such as a non-profit organization) that have permanent establishments in only one province or territory.

If a corporation does not fit into either of the above categories, it has to file a regular T2 Corporation Income Tax Return.

The T2 Corporation Income Tax Guide provides instructions for completing these two types of returns.

Where do you file the T2 (corporation) return?

Where you file the T2 return depends on whether or not the corporation is resident in Canada, and its location.

Resident corporations:

Most corporations can use the Corporation Internet Filing Service to file their return for 2002 and the following years using a Canada Revenue Agency approved software. T2 returns can also be mailed to one of CRA's taxation centres.

T2 returns for non-resident corporations must be sent to:

*Note: "non-profit" also known as nonprofit organizations, non profit organizations, not-for-profit organizations, voluntary organizations and volunteer organizations.

DISCLAIMER
Information contained in this section is of a general nature only and is not intended to constitute advice for any specific fact situation. For particular questions, the users are invited to contact their lawyer. For additional information, see contact(s) listed below.

Manitoba Contact(s):
See National Contact.

National Contact(s):
Canada Revenue Agency
Toll-free (information): 1-800-959-5525 (Business enquiries and registrations)
Toll-free (publications): 1-800-959-2221 (Forms and publications)
Web site: http://www.cra.gc.ca/menu-e.html