Tax questions

Canadian tax questions accountants ask, answered with sources

Deadlines, penalties, payroll maximums and corporate rules for Canadian accountants, each answered by the Canadian CPA agent with the tax year and the CRA page.

• CPP max 2026: $4,230.45 per employee, plus $416 of CPP2: For 2026, CPP tops out at $4,230.45 each for employee and employer, and CPP2 adds $416 each. YMPE $74,600, YAMPE $85,000, sole proprietor figures and the math.
• T2 filing deadline: 6 months after year end, balance due in 2 or 3: A T2 is due six months after year end, and a month end year end files by the last day of the sixth month. Tax owing is due in two months, or three for a CCPC.
• T2 deadline after dissolution: 6 months from the dissolution date: The final T2 is due six months after the tax year ending on the dissolution date; the balance is due in 2 or 3 months. Worked dates, line 078, RC145 and s.88.
• T3 filing deadline: 90 days after year end (March 31, 2027 for 2026): A T3 return, its slips and any balance owing are due 90 days after the trust year end: March 31, 2027 for 2026. Estate, leap year and weekend dates inside.
• T4 slip deadline: March 1, 2027 for 2026 slips (Feb 28 is a Sunday): T4 slips are due the last day of February. 2026 slips are due March 1, 2027 (Feb 28 is a Sunday); 2025 slips were due March 2, 2026. Penalties and closures.
• T5 slip deadline: March 1, 2027 for the 2026 tax year: T5 slips for 2026 are due March 1, 2027, as February 28 is a Sunday. The $50 rule, owner dividends, the more than 5 slips online rule and late filing penalties.
• T4A deadline: 2026 slips due February 28, 2027 (on time March 1): 2026 T4A slips are due February 28, 2027, a Sunday, so March 1 counts as on time. Box 048 over $500, electronic filing above 5 slips, penalties and T5018.
• T5018 deadline: June 30, 2027 for 2026, or six months after year end: The T5018 return is due six months after your reporting period ends: June 30, 2027 for calendar 2026. Fiscal year end dates, the $500 test and penalties.
• NR4 deadline: March 31, 2027 for 2026 slips, tax by the 15th: NR4 slips and the return for 2026 are due March 31, 2027 (estates and trusts: 90 days after year end). Part XIII tax is due the 15th of the next month.
• Self employed tax deadline: file by June 15, 2026, pay by April 30: Sole proprietors had until June 15, 2026 to file 2025 returns, but the balance was due April 30, with interest from May 1. Spouse, instalment and GST/HST dates.
• GST filing deadline: one month after the period, three if annual: GST/HST returns are due one month after each monthly or quarterly period and three months after year end if annual. Sole proprietors file June 15, pay April 30.
• Payroll remittance due dates: the 15th, or sooner above $25,000: Regular remitters pay by the 15th of the next month. Quarterly, threshold 1 and threshold 2 dates, AMWA limits, 3% to 10% late penalties and the weekend rule.
• Notice of objection deadline: 90 days, or a year past the T1 due date: Corporations, trusts and GST/HST get 90 days from the notice date. Individuals get the later of 90 days or a year after the filing due date. Table and examples.
• CRA reassessment period: 3 years, or 4 if the corporation isn't a CCPC: The CRA has 3 years from the notice of assessment to reassess individuals and CCPCs, 4 for other corporations. Extensions, waivers, fraud and GST/HST rules.
• T1135 penalty: $25 a day to $2,500, far more if it's deliberate: A late T1135 costs $25 a day for up to 100 days ($100 minimum, $2,500 cap). A knowing failure costs $500 a month, $1,000 after a demand, then 5% of cost.
• T1135 filing requirements: file once foreign cost tops $100,000: File Form T1135 if specified foreign property cost over $100,000 at any time in the year. What counts, Part A under $250,000 versus Part B, and the due date.
• The T2 late filing penalty is 5% plus 1% a month, capped at 17%: A late T2 costs 5% of tax unpaid at the filing deadline plus 1% per complete month, 17% at most. Repeat failures cost 10% plus 2% a month, up to 50%. Worked example.
• CRA instalment interest: 7% compounded daily for all of 2026: CRA instalment interest is 7% for 2026, compounded daily on late or short instalments. The $25 floor, offset credit, penalty over $1,000 and a worked example.
• CRA interest rate on overdue taxes: 7% for Q4 2026, compounded daily: As of October 2026, the CRA charges 7% on overdue tax, CPP and EI, compounded daily. Refunds earn 3% or 5%. Every quarter since 2025 and a worked example.
• CRA prescribed interest rates 2026: 3% all year, 7% on overdue tax: The CRA prescribed rate is 3% in every 2026 quarter, the rate for spousal loans and employee loan benefits. Overdue tax is 7%. Full table and worked example.
• CRA voluntary disclosure program: 75% interest relief, 25% if prompted: Since October 1, 2025, unprompted VDP applications get 75% interest relief and 100% penalty relief; prompted ones get 25% and up to 100%. Conditions and RC199.
• EI max 2026: $1,123.07 per employee on $68,900 of earnings: For 2026, EI premiums stop at $68,900 of insurable earnings: $1,123.07 for the employee and $1,572.30 for the employer. Quebec rates, 2025 figures, T1 lines.
• Accelerated remitter threshold: $25,000 AMWA, $100,000 for threshold 2: An AMWA of $25,000 two years back makes your client a threshold 1 accelerated remitter; $100,000 makes it threshold 2. Due dates, examples, associated corps.
• T4 box 14: total employment income, taxable benefits included: T4 box 14 is total employment income before deductions: pay, vacation pay, bonuses, retro pay, taxable benefits. What stays out, and why boxes 24 and 26 differ.
• CRA standby charge: 2% of cost per 30 days, or 2/3 of the lease: The CRA standby charge is 2% of an owned car's cost per 30 days (24% a year) or 2/3 of the lease cost. Reduced charge rules and a $50,000 car worked to the T4.
• Operating cost benefit 2026: 34 cents a personal km, 31 for car sales: The 2026 operating cost benefit is 34 cents per personal km (31 cents in car sales), same as 2025. Plus the 50% standby option, the 45 day rule and an example.
• CRA automobile allowance rates 2026: 73 cents, then 67 cents a km: For 2026, a reasonable CRA car allowance is 73 cents per km for the first 5,000 km and 67 cents after, plus 4 cents in the territories. Rules, 7,200 km example.
• Class 10.1 limit 2026: $39,000 plus sales tax, up from $38,000: The class 10.1 limit for 2026 is $39,000 plus GST/HST or PST, up from $38,000. ZEVs stay at $61,000, leases at $1,100 a month, interest at $350. Worked example.
• Home office expenses 2025: detailed method only, T2200 required: For 2025, employees claim home office costs only with the detailed method, a T2200 signed by the employer and Form T777. Conditions, deductions and an example.
• Small business deduction 2026: 9% federal rate on the first $500,000: For 2026 the federal small business rate is 9% on the first $500,000 of active business income. Grinds, short years and every province's rate and limit.
• Passive income SBD grind: $5 off per $1 of AAII over $50,000: The federal business limit drops $5 for every $1 of AAII over $50,000 and is gone at $150,000. What counts as AAII, the timing rule, a table and an example.
• Associated corporations in Canada: 5 tests, one $500,000 limit: Corporations are associated under ITA s.256(1) through control, common control or 25% cross ownership by related people. They then share one $500,000 SBD limit.
• Ontario corporate tax 2026: 26.5% general, 11.2% SBD rate from July 1: Ontario 2026 combined rates: 26.5% general, 25% M&P, 50.17% on CCPC investment income. Small business income: 12.2%, then 11.2% from July 1, 2026.
• RDTOH: two pools since 2019, refunded at 38 1/3% of dividends paid: RDTOH refunds 38 1/3% of taxable dividends paid. Since 2019 it splits into eligible and non eligible pools. What feeds each, T2 lines and a $100,000 example.
• GRIP account: 72% of full rate income caps eligible dividends: GRIP caps the eligible dividends a CCPC can pay without the 20% Part III.1 tax. It adds 72% of full rate taxable income. Formula, Schedule 53, worked example.
• Capital dividend account: elect on T2054 by the payable date: The capital dividend account holds a private company's untaxed half of gains and net life insurance. File T2054 on time or owe a penalty and 60% Part III tax.
• Shareholder loan CRA rules: repay within one year of year end: A shareholder loan is income under ITA 15(2) unless it's repaid within one year after the lender's year end. Deadline table, the series trap, 3% 2026 benefit.
• Section 85 rollover: elect between tax cost and FMV, file a T2057: A section 85 rollover moves property into a corporation for shares at an elected amount from tax cost to FMV. The limits, T2057 deadline, penalty, example.
• TOSI rules: split income taxed at 33% federally unless excluded: TOSI taxes split income at the 33% top federal rate for 2026. Exclusions by age, the excluded business and excluded shares tests, T1206 and a worked example.
• Lifetime capital gains exemption 2026: $1,275,000 of gains: The 2026 lifetime capital gains exemption is $1,275,000, a $637,500 deduction: $1.25M indexed by 2.0%. QSBC tests, CNIL, AMT, a year table and a worked example.
• Capital gains inclusion rate 2026: 50%, two thirds hike cancelled: The 2026 capital gains inclusion rate is 50% for individuals, corporations and trusts. The two thirds increase was cancelled in March 2025. Timeline, example.
• Eligible dividend gross up 2026: 38%, with a 15.0198% federal credit: For 2026, eligible dividends are grossed up 38% with a 15.0198% federal credit; non eligible 15% with 9.0301%. T5 boxes, Ontario rates and a worked example.
• Basic personal amount 2026: $16,452, falling to $14,829 at high income: The 2026 federal basic personal amount is $16,452 up to $181,440 of net income, falling to $14,829 at $258,482. At 14% it saves $2,303.28. Plus provinces, TD1.
• OAS clawback 2026: starts at $95,323, gone by $155,320: The 2026 OAS clawback starts at $95,323 of net income and takes 15% of the excess, fully at $155,320 (65 to 74) or $161,320 (75 and over). 2025: $93,454.
• RRIF minimum withdrawal table: 5.28% at 71, 5.40% at 72, 20% at 95: The RRIF minimum is the January 1 value times a prescribed factor: 1/(90 minus age) under 71, 5.28% at 71, 5.40% at 72, up to 20% at 95. Full table and example.
• Alternative minimum tax Canada: 20.5% above $181,440 for 2026: Canada's AMT for 2026 is 20.5% of adjusted taxable income over $181,440. Gains count at 100% (30% for LCGE), many deductions at 50%, and a 7 year carryover.
• RRSP limit 2026: $33,810, or 18% of 2025 earned income: The 2026 RRSP dollar limit is $33,810, capped at 18% of 2025 earned income less any pension adjustment. Contribute by March 1, 2027. The 2027 limit is $35,390.
• Bare trusts: no T3 for 2024 or 2025, reportable ones file for 2026: Bare trusts file no T3 or Schedule 15 for 2024 or 2025. Reportable bare trusts file for years ending December 31, 2026 onward, first due March 31, 2027.
• Quick method GST/HST: Ontario services remit 8.8%, GST provinces 3.6%: Quick method GST/HST: remit 8.8% of sales with tax in Ontario (3.6% in GST provinces), minus 1% on the first $30,000. Who qualifies, Form GST74, an example.
• GST registration threshold: $30,000 in one quarter or four: GST/HST registration threshold: $30,000 of taxable supplies in one calendar quarter or four in a row ($50,000 for public service bodies). Dates and examples.