Economical Rental Corporation Tax Return for Canadian Businesses

Ontario charges its own graduated personal rates, plus a surtax and the Ontario Health Premium, on top of federal tax, so the combined marginal rate climbs with income. For corporations in 2026 the Ontario small business rate is 3.2%, falling to 2.2% effective 1 July 2026, which gives a combined federal and provincial small business rate of 12.2% falling to 11.2%; a 31 December 2026 year end blends to roughly 11.7%. The Ontario combined general rate for 2026 is 26.5%.

Gather every slip you receive: T4 for employment, T4A for pensions, self-employment or other income, T5 for investment income and T3 for trust and fund distributions. Add RRSP and FHSA receipts, tuition, medical, donation and childcare receipts, rent or property tax details if your province gives a credit, and last year's notice of assessment for carryforwards. Self-employed filers need full income and expense records. Keep everything six years after the tax year.

Different taxes run on different clocks. A corporation files its T2 six months after the fiscal year end, with the balance due two months after year end, or three months for an eligible CCPC claiming the small business deduction, and pays instalments monthly or quarterly once its tax is more than a small amount. GST/HST returns are monthly, quarterly or annual depending on revenue. Payroll deductions are remitted at least monthly, and sole proprietors pay quarterly instalments.

The CRA does not hand back a completed copy of your corporate return to download. Sign in to My Business Account to see assessed figures, notices of assessment, balances and account history for the corporation, which is usually what a lender or buyer wants. The return itself comes from whoever filed it: your tax software file or your preparer's records. The CRA will also release account information in writing when proper authorisation is on file.

Pay it the same way you remit payroll source deductions, using your payroll program account number so the money lands on the right account. Options are online banking through your bank's CRA payment option, My Business Account or the CRA's online payment service, pre-authorized debit, or a payment at a Canadian financial institution. Interest keeps accruing until the balance is cleared, so pay first and dispute afterwards if you plan to object.

Employers must issue T4 slips by the end of February for the previous year, so start with the payroll contact at the former employer, since a stale mailing address is often the whole problem. Copies filed with the CRA also appear in the tax information slips section of CRA My Account. If neither route works, file on time using your pay stubs and final pay records, and tell the CRA the slip is missing.

The CRA does not usually move a due date, but you can ask for a payment arrangement that spreads the balance over time. Interest keeps running while you pay. Apply through My Account, My Business Account, or the CRA's debt management call centre. Where interest or penalties arose from circumstances beyond your control, ask for relief using form RC4288. British Columbia's property tax deferment program is a separate provincial scheme with its own application.

Sometimes. A medical expense claim for massage therapy only works if the therapist is authorised to practise under the law of the province where the service was given, and massage therapy is regulated in some provinces and not others. Where it does not qualify, the receipt cannot be claimed even with a doctor's referral. Check the CRA's list of authorised medical practitioners by province before claiming, and keep receipts showing the practitioner and date.

A T4A reports amounts that are not employment income: pension and annuity payments, retiring allowances, self-employed commissions, research grants, scholarships, certain benefit payments, and fees paid for services to someone who is not your employee. The payer prepares it for the calendar year in which the amount was paid and must issue it by the last day of February in the following year. Payments to employees belong on a T4 instead.

Yes. A corporation that paid more in instalments than its final liability has the overpayment refunded once its T2 is assessed, and refundable credits or a loss carried back to an earlier year can also create a refund. A GST/HST registrant whose input tax credits exceed the tax it collected claims the difference on its GST/HST return. Sole proprietors receive any overpayment through their personal T1 rather than as a separate business refund.

Each deduction has its own base. CPP contributions apply to pensionable earnings above the annual basic exemption up to that year's maximum pensionable earnings, and a second contribution (CPP2) then applies on earnings between that ceiling and the year's additional ceiling — for 2026 at 4% on earnings from $74,600 to $85,000; EI premiums apply to insurable earnings up to a separate maximum, with the employer paying a larger share than the employee; income tax withheld depends on the pay period, the province of employment and the credits claimed on the employee's Form TD1. The CRA payroll deductions online calculator applies the current year figures for you.

Yes. Old Age Security is taxable income, reported on the annual slip Service Canada issues and included on your return with your other income. No tax is withheld unless you ask Service Canada to withhold it, so OAS on its own can create a balance owing each spring. Higher-income recipients also face the recovery tax, which claws back part or all of the pension once net income passes a threshold that is indexed annually, with monthly payments reduced afterwards.