Timeline of a T2 Filing in Canada
From fiscal year-end to CRA Notice of Assessment. Every step, every deadline, and what your CPA does at each stage. A complete walkthrough for Canadian business owners.
A T2 corporate tax filing takes 8 steps from year-end to CRA confirmation: close the books, reconcile accounts, prepare financial statements, calculate corporate tax, complete GIFI schedules, file the T2 electronically, pay any balance owing, and receive the Notice of Assessment. The entire process takes 4 to 8 weeks for a prepared business.
The T2 Filing Process Has Two Deadlines, Not One
Most business owners think there is one T2 deadline. There are two. The payment deadline comes first: 2 months after your fiscal year-end (3 months if your corporation qualifies for the SBD and had taxable income under $500,000 in the prior year). The filing deadline comes second: 6 months after your fiscal year-end. Miss the payment deadline and CRA charges compound daily interest. Miss the filing deadline and CRA adds a late-filing penalty on top of the interest.
| Fiscal Year-End | Tax Payment Due | T2 Filing Due |
|---|---|---|
| December 31 | February 28 (March 31 if SBD) | June 30 |
| March 31 | May 31 (June 30 if SBD) | September 30 |
| June 30 | August 31 (September 30 if SBD) | December 31 |
| September 30 | November 30 (December 31 if SBD) | March 31 |
Pay First, File Second: CRA charges interest from the payment deadline, not the filing deadline. For a December 31 year-end, interest starts March 1 even though the return is not due until June 30. Estimate and pay early to stop the interest clock.
8-Step T2 Filing Timeline
Based on a December 31 fiscal year-end. Adjust dates for your corporation's specific year-end.
Close the Books
Record all December transactions. Process final invoices, payments and adjustments. Post year-end journal entries for accruals, prepaid expenses and depreciation. The books must be complete before anything else can begin.
- Final bank reconciliation for December
- Record all outstanding invoices and bills
- Accrue expenses incurred but not yet billed
- Reverse prior-year accruals as needed
Reconcile All Accounts
Every balance sheet account reconciled to supporting documentation. Bank accounts, credit cards, loans, HST, payroll liabilities, shareholder loan, intercompany balances and retained earnings.
- Bank accounts matched to statements
- Credit cards reconciled to year-end statements
- Shareholder loan account verified with withdrawals/repayments
- HST account reconciled to filed returns
- Payroll liabilities confirmed to T4 totals
Prepare NTR Financial Statements
Balance Sheet, Income Statement and Notes to Financial Statements prepared from the reconciled trial balance. NTR (Notice to Reader) is the standard engagement for most small businesses. CRA requires financial statements with every T2.
- Balance Sheet with assets, liabilities and equity
- Income Statement with revenue, COGS and expenses
- Notes disclosing accounting policies and significant items
- Retained earnings continuity schedule
- NTR from $250/year at Gondaliya CPA
Calculate Corporate Tax
Federal and Ontario tax calculated from the financial statements. Small business deduction applied on first $500,000 of active income. CCA (depreciation) optimized. Loss carryforwards and carrybacks applied. Instalments credited. Net tax owing or refund determined.
- Federal tax at 9% (SBD) or 15% (general)
- Ontario tax at 3.2% (SBD) or 11.5% (general)
- CCA schedules for all asset classes
- Prior-year losses applied to reduce current tax
- Instalments paid during the year credited
Pay Balance Owing
The payment deadline is 2 months after year-end (3 months for SBD-eligible CCPCs). Pay the estimated balance owing now to stop interest from accruing. Even if the T2 is not finished, pay the estimate. You can adjust after filing.
- Pay via CRA My Business Account or bank payment
- Interest rate: 10% compounding daily from day after deadline
- Overpayment refunded after assessment
Complete GIFI Schedules and T2 Return
GIFI (General Index of Financial Information) maps every financial statement line to CRA codes. T2 schedules completed: Schedule 1 (net income reconciliation), Schedule 8 (CCA), Schedule 50 (shareholder info), Schedule 100-141 (GIFI) and others as needed.
- Schedule 1: book-to-tax adjustments
- Schedule 8: CCA claims by asset class
- Schedule 50: shareholder information
- Schedule 100-141: GIFI balance sheet and income statement
- Schedule 125: income statement detail
File Electronically with CRA
The T2 is filed electronically using CRA-certified software. CRA issues an electronic confirmation number immediately upon receipt. Most corporations are required to file electronically (mandatory for corporations with gross revenue over $1 million, voluntary for all others but strongly recommended).
- Filed via CPA using TaxCycle or similar certified software
- Confirmation number received within minutes
- Late-filing penalty: 5% + 1%/month up to 12 months
- Repeat penalty: 10% + 2%/month up to 20 months
Receive Notice of Assessment
CRA processes the return and issues a Notice of Assessment (NOA). The NOA confirms the tax owing, any adjustments, credits applied and the final balance. If CRA makes changes, you have 90 days to file a Notice of Objection. Keep the NOA with your corporate records.
- NOA arrives in CRA My Business Account and by mail
- Confirms assessed tax matches filed amount (or adjustments)
- Refund issued if overpaid (direct deposit in 2-4 weeks)
- 90-day objection window if CRA changes your return
Complete T2 Deadline Summary (December 31 Year-End)
| Milestone | Deadline | Penalty If Missed |
|---|---|---|
| T4 and T5 slips issued | February 28 | $10/day per slip up to $1,000 per type |
| Tax payment (SBD eligible) | March 31 | Compound daily interest at 10% |
| Tax payment (non-SBD) | February 28 | Compound daily interest at 10% |
| T2 return filed | June 30 | 5% + 1%/month (10% + 2% repeat) |
| HST annual return (if applicable) | June 15 | 1% + 0.25%/month up to 12 months |
| CRA Notice of Assessment | 4-8 weeks post-filing | N/A |
| Objection deadline (if needed) | 90 days from NOA date | Right to object expires |
Pro Tip: Start bookkeeping cleanup the week after year-end. The earlier your books are clean, the earlier your CPA can file. Early filing means early refunds and zero risk of penalties. Bookkeeping Services →
Case Study: Mississauga Corp Filed 2 Months Early and Received a $4,200 Refund Before Competitors Even Started
A Mississauga IT services corporation with a December 31 year-end engaged us for monthly bookkeeping. Books were clean by January 7. Financial statements completed by January 18. T2 filed electronically on February 3. CRA issued the Notice of Assessment on February 28. The corporation received a $4,200 refund (from quarterly instalment overpayments) by direct deposit on March 8. Most businesses with the same year-end had not even started their bookkeeping by that date. Early filing also meant the refund was reinvested into Q1 operations, improving cash flow during the slowest quarter. Get Started →
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