T2 Short Return services

Filing Nil Return services

Taxory provides corporate T2 Short Return tax filing for Canadian corporations without activity during the tax year. Our Nil Return Filing services are quick and affordable. Get in touch with one of our accountants to get more information.

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Nil Return filing services. T2 short return filing.

What is corporate Nil return?

In Canada, when a company produces revenue every year, it also reports the revenue to the Canada Revenue Agency (CRA ). However, when the company has no activity during the fiscal year, it still has to file a report to CRA, but it is a different tax filing. Instead of filing a regular T2 Corporation Income Tax Return, the company files a T2 Short Return (T2SHORT), which is also called a Nil Return.
The Nil Return means the company is active but has not produced any income in the previous fiscal year, so there is no taxable income, and CRA should not expect any tax payments from the company. The T2 Short Return also serves as a provincial or territorial income tax return in all provinces except for Quebec and Alberta.

T2 Short Return filing eligibility criteria

To be eligible to file a T2 Short (Nil) return, the corporation should be a Canadian-controlled private corporation during the tax year, and either has a loss or no income (nil income). Another case is when a corporation is exempt from tax, for example, a non-profit corporation.

In addition, the corporation should satisfy all of the following criteria:
• It operates within a single province or territory.
• It does not claim any refundable tax credits, except for refunds of instalments it has paid.
• It has neither received nor distributed any taxable dividends.
• It conducts its financial reporting in Canadian currency.
• It is not subject to an Ontario transitional tax debit.
• It does not have an amount calculated under section 34.2 of the Income Tax Act.
As a business owner, you may have a general idea if your corporation meets all the criteria for nil return filing. However, you need to discuss that with your accountant to be 100% sure if you are eligible.

Corporate Nil tax return eligibility criteria. Are you eligible for T2 Short Return?
Top 3 reasons why should you file Nil Corporate Tax Return (T2SHORT)

Top 3 reasons for filing a nil corporate tax return

In Canada, all resident corporations must file a return every tax year up to the date of dissolution, even if they are not active or have no tax payable unless they are a registered charity.

  1. That is not only a legal requirement but also a common sense. You want to keep your corporation in good shape, be transparent, and have a good history with CRA, resulting in less attention and reduced audit risk.
  2. In addition, when your company starts generating income, you can only file the corporate taxes if all your previous year’s taxes are filed; you can’t skip any year and must file nil returns first.
  3. Finally, if you want to dissolve your corporation, you still have to file a “Final corporate tax return,” which will let CRA know your corporation is closed and not active anymore. Still, you can’t do that without filing taxes for all previous years, so if you did not have any income and activity, you still have to file nil returns for all previous years.

CRA does not know the real reason why you do not file your corporate tax return, but they assume that you have income and are supposed to pay taxes. First, they will try to contact you, and eventually, they may assess your corporation based on the information they have access to based on subsection 152(7) of the Income Tax Act. If they find that it was income and you owe taxes, that will result in charging you interest on taxes and a late-filing penalty starting the day after each return was due.

Our Nil Return Filing Services

Situations when you need to file nil returns usually apply to small companies, such as startups, independent IT Contractors, construction companies, and many other industries.

For example, we have clients who have just opened a startup, and while the corporation is active, there is no financial activity because the owner may be looking for investors or clients. In such cases, we file a nil return until we see any income and are required to file a regular T2 Corporation income tax return.

We also have many independent IT Contractors who may temporarily work full-time but want to keep the corporation open because they may return to contract roles. For such clients, it is more convenient to pay a small fee for the T2 Short Return instead of closing corporations and opening a new one when needed.

There may be other reasons for your corporation not to generate an income, but you still have to file your T2 Short return with CRA.

At Taxory, you will find full support for your corporation. We can help you handle regular T2 Tax returns or T2 Short Nil Tax returns. In addition, our company provides bookkeeping, payroll and HST services. Our corporate accountant understands all the complexity and requirements of the corporate tax filing process and will gladly assist you.

We have provided tax filing services for a long time, so we already have a process that simplifies onboarding new clients and makes it straightforward for you as a business owner.

Why Choose Taxory for T2 Short return preparation and filing

Benefits of choosing Taxory for filing T2 Short Return

  • When you work with Taxory, you can expect high-quality, premium services. We are aware of all significant deadlines and commitments to avoid penalties and late filing fees.
  • We handle all communication with CRA and provide all required documents to the government.
  • Considering your prior year’s income and expenses, we can provide personalized advice for your company, predict your best tax strategy and plan accordingly.
Filing T2 Short Return step-by-step guide.

A step-by-step guide for filing T2 Short Tax return with Taxory

Below is the step-by-step guide on how our company handles your Nil Corporate tax return.

  1. Introduction consultation: When you get onboard as a client of Taxory, we provide a quick overview of our services and what we can do for your company and review your requirements.
  2. Eligibility assessment: We need to understand your eligibility for nil return filing. We had many cases where the client believed that he needed to file a nil return, but in reality, it may be an activity for a company, which makes it ineligible, and we have to file a regular tax return. If your company has an income but overall reports losses, we have to file a regular T2 Corporate tax return, but we provide a discount for companies that had losses during the fiscal year.
  3. Price confirmation and documents request: once we know that you are eligible for a nil return, we will give you a quote to prepare and file your taxes and ask you to provide all the documents we need to file.
  4. Authorization request: we only have access to your CRA account if you authorize our company; you can do the authorization in the CRA My Business account; the process is straightforward, and we will provide instructions.
  5. Nil return preparation: Once we have all the documents, we will start working on your return; that may take some time, depending on whether we have any additional questions or the time of the year (we may respond slowly during the tax season, between February and May).
  6. Once we complete the job, we send you a confirmation and the invoice. You review, confirm and pay.
  7. Filing taxes: we file your taxes to CRA and provide you with the confirmation.

Typically, we need the following documents to file your taxes, so you can start working on preparing them in advance:

  • Copy of the article of incorporation
  • Business bank statements (checking/savings/credit cards).

If you want to file a T2 Short (Nil return) for your corporation but have your HST, Payroll or any other accounts open, you need to file a Nil return for those accounts as well. Please let your accountant know if you have not closed HST or Payroll accounts because CRA will expect you to file returns for that accounts as well. 

Learn what our clients share about Taxory

Nil return filing services are very common with small businesses, so we have a lot of clients and positive reviews. Learn what our clients share about Taxory and its services.
  • Taxory Accounting helped us to resolve a few issues with CRA, regarding preparation of the 2020 Taxes for an independent owner/operator business, as well as some past issues from 2018... read more

    Theresa Hoyt Avatar Theresa Hoyt

    Anna / Taxory provides accounting services to our company and we are more than happy with her service. She is prompt, responsive and super professional. She has been... read more

    Marc Ronne Avatar Marc Ronne

    I highly recommend Taxory!!! Excellent service, prompt communication and clear step-by-step directions: my experience is all positive with Taxory. Anna's knowledge, guidance and clear and positive communication removed all stress... read more

    c k Avatar c k

    After going round in circles with other accountants, we were lucky to run into Taxory online. They were quick to respond to our inquiries and clearly explained to us what... read more

    GL Dabiri Avatar GL Dabiri

    Anna helped me shut down my one-man corporation after my previous accountant ghosted me. She quickly picked up the trail and not only filed the final return but did all... read more

    Matt Crider Avatar Matt Crider

    I had a great time working with Anna for my corporation tax returns. Thank you for the patience and guidance. Very professional. I surely recommend Taxory.

    Thiago Valente Avatar Thiago Valente
  • Anna has been amazing with me and my organization's taxes. My tax return was NOT easy. She did the research. She called the CRA. She walked through everything with me;... read more

    Nancy Tavares-Jones Avatar Nancy Tavares-Jones

    Excellent and prompt service. Very thorough, affordable, and efficient. Great communication skills, very knowledgeable, and easy to work with. We will continue to work with Anna and the Taxory team... read more

    Lana Goldberg Avatar Lana Goldberg

    I needed a knowledgeable accountant to do my corporate taxes, and decided to reach out to Anna based on other positive reviews on Google. She was responsive, efficient and... read more

    Leighton C Avatar Leighton C

    Anna of Taxory accounting has been doing my corporate taxes now for 3 years and I couldn't be more pleased with her level of professionalism and expertise provided. Anna... read more

    Joe Costa Avatar Joe Costa

    I've been working with Taxory for a while now, with Anna as my corporate accountant. She is very reliable. I found her meticulous as a nerd and patient as a... read more

    Lana K Avatar Lana K

    Excellent service - quick and accurate. Exactly what you would expect from qualified professional. Will definitely recommend for business and/or personal accounting and bookkeeping

    Philip Posvaluk Avatar Philip Posvaluk

HST tax strategy and planning

Taxory has extensive experience with HST and provides complete HST filing services for all our corporate clients. We go beyond what other accounting firms offer and present you with the best HST tax strategy to ensure optimal taxes.

Learn more about HST

Nil Return FAQ (Frequently Asked Questions)

What is the deadline for filing a Nil return?

The deadline for filing a Nil Corporate tax return is the same as for a regular corporate tax return; it is six months from the anniversary date, which is usually the date when the corporation was established. Typically, when you have income and need to prepare regular T2 corporate taxes, you have three months to pay your taxes to CRA, so while you have six months to file taxes, you need to work with your accountant within that three-month deadline. However, in the case of a Nil return, you do not pay taxes because there was no income (nil income), so you can meet your accountant after the three-month payment deadline. Regardless, tax preparation takes at least one week, so do not wait until the last day and contact our accounting firm in advance for help filing your Nil return corporate taxes.

Is the Nil corporate tax return the same as the T2 Short return?

The terms “Nil return” and “T2 Short return” are interchangeable. When you are looking for relevant information on the CRA website, the “T2 Short return” or “T2SHORT” are the most common terms, but when discussing with your accountant, they usually refer to it as a “Nil return.” Also, the “Short return” refers to both losses and no income (Nil), while Nil return mainly refers to no-income return.

What happens if you do not file a corporation tax Nil return?
If you do not file a nil return, the CRA may send notifications asking you to file it. Eventually, they may decide to assess your taxes based on the information they can access. We suggest filing nil returns on time to avoid attention from CRA. Filing a nil return is an easy way to let CRA know that the business has no income during the tax year, and they should not expect tax payments from you.

Need to file your corporate taxes?

Let us know if you need help with your corporate taxes, our company provide full corporate tax support, including regular T2 corporate tax filing.

Corporate tax services

File your corporate Nil Tax Return with Taxory. It is quick, easy and affordable!

Filing corporate tax returns with Taxory is an easy process. We already filed taxes for hundreds of clients; we have a well-defined process where we ask only for the information we need, which allows us to provide quick and efficient services. Please use the form below to get in touch, and one of our accountants will be back with you as soon as possible.

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