Federal corporate tax balance-due day

Who it applies to

Every corporation with a tax balance owing. The three-month deadline requires three cumulative conditions: a deduction claimed under section 125 in the current or preceding year, CCPC status throughout the year, and prior-year taxable income not exceeding the business limit.

Important qualification

The three-month balance test is NOT the quarterly instalment test — see “Federal corporate instalments”. A corporation can meet one without the other.

Due dates

The roll-forward to the next business day is already applied where the date falls on a Saturday, Sunday or statutory holiday.

If you miss the date

Interest compounds daily on the unpaid balance from the due date. The balance is due BEFORE the return: paying on time without filing does not avoid the late-filing penalty, and filing on time without paying does not avoid interest.

Frequently asked questions

Does paying on time without filing avoid the penalty?

No. These are two distinct failures: the late-filing penalty targets the late return, interest targets the late payment. Avoiding one does not avoid the other.

Is the three-month test the same as the quarterly instalment test?

No, and the confusion is expensive. Quarterly instalments fall under ss. 157(1.1) and 157(1.2); the three-month balance falls under the definition of “balance-due day” in s. 248(1). A corporation can meet one without the other.