The T3 is the income tax return a trust or estate files annually, due 90 days after its tax year-end, reporting income earned and allocations to beneficiaries.
A trust files a T3 Trust Income Tax and Information Return to report its income and how it was distributed. The return is due 90 days after the trust's year-end, and most personal trusts use December 31, making the deadline March 31. Income paid to beneficiaries is deducted by the trust and taxed in their hands; income retained is taxed in the trust, usually at the top rate.
Expanded reporting rules now require many previously exempt trusts, including bare trusts, to file a T3 and a Schedule 15 disclosing beneficiaries, trustees and settlors, with steep penalties for non-compliance based on trust property value.
A family trust with a December 31 year-end must file its T3 by March 31, reporting the year's income and issuing T3 slips for the amounts allocated to each beneficiary.
Primary source
- Income Tax Act, s. 150 Filing returns of income — general rule
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Canada runs three systems. The federal GST is 5% for 2026 and applies nationally. Five participating provinces fold a provincial share into one harmonised rate: 13% in Ontario, 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island, and 14% in Nova Scotia since 1 April 2025. Others add their own tax to the 5% GST, giving 12% in British Columbia and Manitoba, 11% in Saskatchewan and 14.975% in Quebec. Alberta and the territories charge 5% only.
Filing is required once tax is owed, and also in several situations regardless of income, including selling property, repaying benefits, splitting pension income, or receiving a request to file from the CRA. Below the basic personal amount most people owe nothing, yet filing still pays: the Canada Child Benefit, the GST/HST credit and provincial credits are all calculated from a filed return. Check the basic personal amount for the year you are filing.
Your marginal rate is the tax on your next dollar. Federal brackets for 2026 run 14%, 20.5%, 26%, 29% and 33% on the highest band, with your province's brackets stacking on top. Your average or effective rate is total tax divided by total income, and it is always lower, because earlier dollars sat in lower brackets or were sheltered by credits. Use the marginal rate to judge an RRSP contribution or extra contract work, the average rate to see what the year cost.
Tax makes up a large share of the retail price, and the exact share depends on the province. Three layers stack: federal excise duty on the tobacco, a provincial tobacco tax, and then GST or HST charged on the selling price. Provinces change their tobacco tax with almost every budget, so take the figures from your province's tobacco tax page and the federal excise duty rate schedule rather than from a general article.
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Reviewed and fact-checked by Udit Gupta
Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA
Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. Big 4 trained at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia, he founded his accounting practice in 2014 to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.
The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023
Editorial policy. Every page is researched against primary sources — the Income Tax Act, CRA publications and CPA Canada guidance — and every rate or threshold is stated with the tax year it applies to.
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