Corporate Income Tax Due Dates for Small Businesses

July 24, 2021

For small business owners, it is essential to keep track of all CRA deadlines, such as the business’s deadline to file corporate tax, HST, and payroll remittances. Failure to meet these important deadlines can lead to expensive interest and penalties.

CRA deadlines can be difficult to keep track of, but hiring a professional accounting team is one of the best ways to make sure that your business completes these filings on time. 

In almost all cases, the tax-filing deadline is six months after your fiscal year end.  

Most small business owners choose to end their tax year at the end of a calendar month, which means that their year-end date would be the last day of the month, six months after the corporate year end. 

Example: If your corporate year end is December 31, your filing due date is June 30. 

If the tax-filing deadline falls on the weekend (Saturday or Sunday) or a public holiday, then the filing due date falls to the first business day following the deadline. 

Corporate Tax Payment Due Date

Although small business owners have six months to file their return, they only have two or three months to pay the balance owing. 

Installment Payments

In general, corporations must pay monthly or quarterly installments. An installment is a way to divide the total amount payable throughout the year. Installments are calculated based on parts of the federal income, provincial, and territorial taxes. 

The first installment payment of the year is due one month or one quarter less a day from the starting day of your tax year. The rest of the payments are due on the same day of each month or each quarter that follows.

You can view your instalment due dates by using the “calculate instalment payments” service online at My Business Account.

You Do Not Have to Make Installment Payments if: 

  1. The corporation is new. Corporations do not have to pay installments in their first year of operation, but they must still pay the amount owed before the payment due date. 
  2. The total amount payable is equal to or less than $3,000. The full payment must still be made before the payment due date. 
  3. The tax year was short. If you change your year-end date, and your fiscal year is shortened to less than one quarter, you may not need to make installment payments for that fiscal period. To be sure, you can confirm your payment requirement status with your accountant.

Penalties and Interest

Penalties are calculated at 5% of the total amount owing the day after the balance is due. An additional 1% is added for each month that the taxes remain unpaid. 

If you miss an installment payment, the CRA will charge installment interest. If the interest exceeds $1,000, an additional penalty of 25% of the installment interest may be applied. 

Although the current interest rate for overdue payments is 5%, this rate can change every quarter. Click here to find the latest interest rates.


Minimizing Delays

Small businesses have the option to file their return in paper format; however, it is the responsibility of the business owner to make sure that the CRA receives the file on time. To make your tax submission process more efficient, it is greatly beneficial to file electronically. Our accounting team is equipped with the latest electronic filing software to ensure that the CRA receives your file on time. 

The same responsibility applies to payments. If the CRA receives a post-dated cheque in the mail after the payment due date, they may choose to charge interest and penalties. The best way to ensure that your payment is made on time is to make payments online through the CRA My Business Account or directly through online banking. For more information on how you can make a payment, click here. 

Corporate Tax Refunds

Once your tax return is submitted, and once you receive your Notice of Assessment, you may notice that the amount you paid in installments exceeds the amount owing on the tax return. In this case, the CRA will issue you a corporate tax refund. The fastest way to receive a refund is through direct deposit, which you can sign up for on the CRA website. 

FAQ

  1. Q: My small business was impacted by the COVID-19 pandemic. Does this influence my filing and payment due date?

A: Although the CRA extended some filing and payment deadlines in 2020, there have been no changes made to filing or payment due dates for corporations in 2021.

  1. Q: What is CRA My Business Account?

A: CRA My Business Account is a secure online portal that provides an opportunity to interact electronically with the Canada Revenue Agency (CRA) on various business accounts. Business accounts include GST/HST, payroll, corporate income taxes, and more.


You can sign up for My Business Account here.

  1. Q: How do I find an accounting team that can assist me with my corporate tax filing?

A: Elite Accounting is pleased to be accepting new corporate clients. You can contact us through our Contact page, by phone at 613.234.6006, or by email to reception@eliteaccounting.ca

Published by Elite Accounting Inc.

© 2021 Elite Accounting

Attribution-NoDerivatives 4.0 International (CC BY-ND 4.0)

Back to the blog
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram