As of tax years beginning after 2023, the Canada Revenue Agency (CRA) mandates that all corporations, including inactive ones, must file their T2 Corporation Income Tax Returns electronically. Non-compliance can result in a $1,000 penalty . This requirement applies even to corporations with no income or activity during the tax year .
Understanding the Filing Requirements
An inactive corporation, defined as one that has not operated during the tax year, is still obligated to file a T2 return. However, such corporations are not required to attach financial statements (Schedules 100, 125, and 141) to their T2 return, though they may do so if desired
Cost-Effective E-Filing Solutions
For inactive corporations seeking affordable e-filing options, several services cater specifically to their needs:
1. T2inc.ca
T2inc.ca offers specialized packages for inactive corporations:T2inc.ca
- Single Zero Income Tax Return: Priced at $199, suitable for businesses with no financial statements or income.
- Advanced Zero Income Tax Return: Starting at $299, this package includes previous filings and financial statement history, ensuring comprehensive compliance .T2inc.ca
2. TaxDeep
TaxDeep provides tailored services for inactive corporations.
- Nil (Null) T2 Return: for $200, this package includes filing a Nil GST Return, T2 Filing for inactive corporations, and up to 1 hour of yearly support for CRA inquiries .
Utilizing CRA-Certified Software
Corporations may also opt to file their T2 returns independently using CRA-certified software. These software solutions allow for electronic completion and submission of T2 returns, including the use of General Index of Financial Information (GIFI) codes for financial statements . It’s important to note that while the CRA certifies software for compatibility, it does not endorse specific products.
Filing Process Overview
To file electronically, corporations can use one of the following CRA services:
- Corporation Internet Filing Service: Requires a Web Access Code or EFILE number and password .
- My Business Account: Suitable for business owners managing their own filings.
- Represent a Client: Designed for authorized representatives or employees handling filings on behalf of a corporation .
Conclusion
With the CRA’s mandatory electronic filing requirements, inactive corporations must ensure compliance to avoid penalties. Affordable solutions are available through specialized services like T2inc.ca and Abraham Accounting, as well as by utilizing CRA-certified software for self-filing. Selecting the appropriate option depends on the corporation’s specific needs and resources. If you are looking for an accountant for your tax here is a list might help you.