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What Is a T2?

July 7, 2015

Tax Question:

What is a T2? What does it have to do with corporate taxes?

Facts:

In Canada, the “prescribed form” for filing federal corporate taxes is called a T2 return. It is the same form for all resident and non-resident corporations subject to Canadian tax. The attachments and the calculations change depending on the situation.

Discussion:

The T2 Jacket, as we call it, is actually named that for a reason. Years ago, the loose papers of the detailed tax calculations were collected in a loose-leaf binder of sorts called a jacket. The jacket was on an 11 by 17 sheet of paper folded in half with the basic identity information on it and summary information from the loose schedules. The jacket also had an index of all the attachments. The representative of the company would sign the back of the jacket and submit it to the Canada Revenue Agency (CRA).

Things have changed a bit over the years. The jacket is now so full of information that it would not fit on an 11 by 17 sheet. It takes 8 or 9 regular 8.5 by 11 sheets of paper these days. The schedules have also gotten so numerous that they would fall out of the loose jacket. So these days we print a little book of schedules and the “jacket” goes at the front.

As the CRA has gone electronic, that little book is now back to a couple of pages of bar codes that get electronically submitted in most cases. Some provinces, like Alberta, have similar forms to the T2 jacket and they duplicate many of the calculations and almost all of the information on the T2 federal return. Most of the provinces’ tax calculations are just schedules that are part of the federal return. They are additional schedules that are attached to the T2 return.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.

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