Why does my corporation owe instalments before its T2 is due?

Arsen Accounting Services · Question 181 · Sources checked October 29, 2026

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The T2 filing deadline and the corporate tax-payment schedule are different. A corporation may need to pay instalments during the year and settle the remaining balance before the return itself is due.

Put payments on a separate calendar

CRA generally requires monthly corporate instalments, with quarterly payments available to qualifying Canadian-controlled private corporations. Eligibility for quarterly treatment includes compliance and financial conditions. The balance is generally due two or three months after year-end, depending on the applicable rules.

Do not assume an annual bookkeeping appointment provides enough time to deal with payments. The tax estimate and instalment schedule should be reviewed while the year is still in progress.

Official guidance: [1], [2].

Reconcile the account, not just the bank

For example, a company sends several payments but allocates one to the wrong fiscal period. The bank total can look adequate while CRA's corporate account still shows an instalment shortfall. Match each payment to the intended year and account.

Prepare the corporate payment file

• Fiscal year-end and previous T2 assessments.
• Current-year profit forecast and known tax adjustments.
• Instalment calculation and CRA account transactions.
• Associated-corporation and compliance information where relevant.

Ask your preparer which instalment method is being used and what changes would justify revising the estimate. Keep tax reserves separate from ordinary operating cash. After filing the T2, reconcile the final liability, payments, and any interest rather than treating the filing confirmation as proof the account is paid in full.