A Calgary corporation had missed several Alberta AT1 returns while staying current federally. We filed the backlog and reduced the penalties.
Alberta administers its own corporate income tax return, the AT1, for corporations with a permanent establishment in the province. This client had been filing federal T2 returns on time but had let the Alberta filings lapse, and interest was compounding on assessed balances. We prepared the outstanding AT1 returns from the federal figures, reconciled the provincial allocation, and applied for penalty relief on the basis of the voluntary catch-up.
A CCPC files its T2 within six months of year-end, with the balance due two months after (three where the small business deduction is claimed). The 9% federal small business rate applies to the first $500,000 of active business income.
Why it bites: The filing and payment deadlines differ, and interest runs from the payment date. Filing on time while paying late still costs money.
The late-filing penalty is 5% of the balance owing plus 1% for each full month late, to a maximum of twelve months. A second late filing within three years doubles both figures.
Why it bites: The penalty is calculated on the balance owing, so a late return with nothing owing costs nothing — which is why filing on time matters even when you cannot pay.
Every engagement above was priced as a fixed fee agreed before the work started, and paid only once the client had reviewed the result. If any of this looks like your situation, the first step is a free 15-minute call — we will tell you plainly whether there is anything worth doing.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. This case study is based on a real client engagement handled by Tax Filings Canada; the client's name and identifying details have been changed. Outcomes depend on your own facts.
Sources. Canada.ca — Personal income tax · Income Tax Act (Justice Laws Website)
