T2 Corporate Income Tax

What Ledger does, and what it does not do

Ledger prepares your corporation’s T2 return from your books. It does not file it with the CRA, and it is not CRA-certified tax software.

To file, import Ledger’s GIFI file into CRA-certified tax software (such as TaxCycle, Taxprep or ProFile), or give the GIFI file and the workpaper PDF to your accountant. You or your accountant are responsible for reviewing the return and filing it on time.

The T2 workspace is available to Canadian corporations (CCPCs and other corporations). Sole proprietorships and partnerships do not file a T2, so they do not see the T2 tab. Incorporated non-profits and other entity types see the T2 tab with CRA guidance only: Ledger does not prepare their T2 yet, so file it with CRA-certified software or through your accountant.

For a corporation in Ontario, Ledger computes federal Part I tax and Ontario basic tax with the small business deduction. For other provinces, Ledger computes the GIFI schedules and federal tax, and marks provincial tax as “not computed”; such a return cannot be finalised in Ledger yet, and the T2 tab names the province. Ledger does not prepare every part of the T2; see What you complete in your tax software.

Open the T2 tab

Go to Tax Hub → T2 Corporate Return and choose the tax year. Ledger defaults to your last completed fiscal year.

Ledger never shows a tax figure while something is missing. Instead it lists what is blocking the return, with a link where Ledger can take you to the place to fix it.

1. Map your accounts to GIFI codes

The CRA’s General Index of Financial Information (GIFI) assigns a code to each line of your financial statements. Ledger’s standard accounts already have GIFI codes. Accounts you created or imported may not.

The GIFI review lists every account with a balance in the year that needs attention:

• Unmapped accounts: choose a GIFI code from the list. Ledger only offers codes that are valid for the account’s type.
• Accounts that need confirmation: standard accounts with a suggested Schedule 1 treatment. Confirm that 505 Income Tax Expense really holds income tax (it then goes to GIFI 9990 or 9995), and that 416 Depreciation and 420 Entertainment, when they have activity in the year, hold amortization and meals and entertainment. If an account holds something else, choose another treatment, or No adjustment. If you mapped 416 or 420 to a different GIFI code, Ledger makes no suggestion: choose the treatment yourself.

Tell Ledger which accounts hold amortization, meals and entertainment, fines and penalties, or charitable donations (each account’s Schedule 1 treatment). Set it in Schedule 1 account treatments, which lists every expense account with activity in the year and shows the Schedule 1 line each treatment feeds. You can also set it through a chart-of-accounts import, or enter the adjustment as a manual Schedule 1 line instead. A suggested treatment is never applied until you confirm it. Ledger then shows each Schedule 1 line from your books; the information icon next to a line names the accounts it comes from.

If you previously entered amortization (line 104) or meals and entertainment (line 121) as a manual Schedule 1 line, remove that manual line when you confirm the account’s treatment. Otherwise the amount is counted twice and the return is blocked. Ledger warns you next to the account and links to the Schedule 1 adjustments.

A treatment belongs to the account and applies in every tax year. On a year whose return is already finalised or filed, an unconfirmed suggestion does not block the return, and you can still change treatments. A change shows as drift against the filed return, which flags that you may need to file an amended return.

When every account is mapped, the review shows All accounts are mapped.

2. Enter the year’s information

Preparer inputs holds the facts Ledger cannot read from your books, such as your active business income, aggregate investment income, whether the corporation is associated with another corporation, the prior year’s taxable capital, and whether all taxable income is allocated to Ontario. Ledger records who entered each answer and when.

If this is not the corporation’s first tax year, enter the earlier tax year ends when asked.

Add the corporation’s CRA business number for income tax (the RC program account, for example 123456789RC0001).

3. Schedules

• Schedule 1 (net income for tax purposes) starts from your books’ net income. Lines that come from your accounts (such as income tax and amortization) are filled in for you. Under Schedule 1 adjustments and Division C claims, add any other addition or deduction, for example line 128 for non-deductible fines and penalties, and enter donation and loss claims.
• Schedule 8 (capital cost allowance): add one row per CCA class with its opening UCC, additions and dispositions. Ledger computes the maximum CCA, recapture and terminal loss. The accelerated investment incentive is applied by default; you can choose the half-year rule for a class or a single addition instead. You may claim less than the maximum. Suggest from fixed assets fills additions and dispositions from fixed assets that have a CCA class. Next year, a class’s opening UCC can carry forward from this year’s finalised return.
• Schedule 4 (non-capital losses): enter your loss pools by the year each loss arose. Ledger applies them against this year’s income and flags a pool that expires this year (losses carry forward 20 years).

The Tax summary then shows net income (line 300), taxable income (line 360), the federal tax lines, Ontario tax and the total tax.

4. Finalise, mark as filed, reopen

• Finalise freezes the return. Ledger saves a copy of the figures and posts an income tax journal: debit your income tax expense account, credit Income Tax Payable (836). If your books already hold a provision, Ledger posts only the difference and shows it before you confirm. The journal is dated in the tax year (the year end by default).
• Mark as filed records that the return was filed outside Ledger. Enter the CRA confirmation number and the filing date.
• Reopen a finalised or filed return when you need to correct it. Ledger reverses the income tax journal and starts a new draft; the earlier version stays in the return history.

Earlier versions stay downloadable. Under Return history, a reopened return is listed as Superseded, with its filing date and CRA confirmation number. Select Download on that row to get its GIFI file and workpaper PDF exactly as they were when you finalised it, for example to support an amended return or a CRA review. The file names end in the version number (_v1, _v2, …), and changes to your books since then never alter them.

If your books change after you finalise, Ledger shows which figures no longer match the finalised return.

5. Instalments and the balance due

Under Instalment payments, select Record payment to record a payment to the CRA. Ledger posts a journal (debit Income Tax Payable 836, credit the bank account you choose). You can void a payment; Ledger posts a reversing journal.

Ledger shows whether instalments are required and how often:

• no instalments when the federal tax and the provincial tax are each $3,000 or less for the current or prior year, or in the corporation’s first tax year. The two are tested separately: an Ontario corporation with $2,700 of federal tax and $960 of Ontario tax needs no instalments, even though the total is $3,660. When only one of them needs instalments, the suggested instalments cover that one only. Under the requirement, Ledger shows a line for the federal tax and a line for the provincial tax. If Ledger does not compute your province’s tax, instalments are shown as required;
• quarterly for an eligible small CCPC. You answer Eligible for quarterly instalments in the year’s preparer inputs; until you answer it, the T2 tab shows the frequency as not confirmed, and the Filing Calendar shows monthly dates marked Estimated;
• monthly otherwise.

The CRA does not send corporations instalment reminders: each corporation calculates and pays its own instalments (CRA, Calculating corporate tax instalments, part of the “Corporate income tax payments” pages that replaced guide T7B-Corp in February 2026). Ledger’s suggested instalments are an aid to that calculation; you remain responsible for the amounts and the dates.

When instalments are required, Instalment options shows the three ways CRA accepts to work them out: option 1, the estimated tax for this year; option 2, last year’s tax; and option 3, the last two years’ tax. Each option is a column with one row per due date. For a year that is not finalised, option 1 is an estimate from your books as they stand. An option Ledger cannot work out (for example, when last year’s tax is not in Ledger) is not shown.

Choose the option you use under Basis used this year. Ledger never chooses for you. If you choose an option that is not available for the year, Ledger says so and does not switch to another one. CRA charges interest when an instalment is late or less than required.

The balance is due 2 months after the tax year end, or 3 months for a CCPC that qualifies. Ledger shows the balance due and its date, but never posts it. The Filing Calendar tab lists the T2 filing date, the balance-due date and the instalment dates. For a year that is not finalised yet, the balance-due and instalment dates are estimates and are marked Estimated. Once you choose a basis, the calendar also shows each instalment’s amount for that basis. For a year that is not finalised, it shows amounts for option 2 or 3 only, because the year’s own tax is not known yet.

6. Exports

• GIFI file (.csv) and GIFI file (.gfi) contain the same data: one code,amount line per GIFI item, in whole dollars. Import it into your tax software.
• Workpaper PDF shows how every figure was computed, for you or your accountant to review.

Ledger rounds GIFI amounts so the totals match your true figures. If a rounding difference of a few dollars is left on the balance sheet, Ledger puts it on your largest liability line (or a line you choose) and shows it in the tab and the workpaper.

Amounts use the CRA’s GIFI signs. Assets, liabilities and equity are positive in their normal direction; a deficit, a net loss and accumulated amortization are negative. Dividends declared (3700 to 3702) are negative, because they reduce retained earnings, and 3849 is the sum of the retained-earnings lines. A GIFI file downloaded before this update showed dividends declared as positive amounts: download it again before you import it.

You can export a draft return to review it; Ledger tells you the download is a draft. Finalise the return before you export the copy you file.

What you complete in your tax software

Ledger prepares the GIFI schedules, Schedules 1, 4 and 8, federal Part I tax and Ontario basic tax with the small business deduction. Complete the rest of the return in your CRA-certified software or with your accountant, including:

• Schedule 50 (shareholder information) and the identification pages of the T2;
• Schedule 9 (related and associated corporations) and Schedule 23 (the business limit allocation among associated CCPCs). Ledger only uses the allocation you enter;
• Schedule 141 (the GIFI notes checklist);
• provincial tax for provinces other than Ontario;
• Ontario tax credits;
• the schedules Ledger does not prepare, such as Schedule 510 (Ontario corporate minimum tax, which Ledger only checks against its thresholds), refundable dividend tax on hand and Part IV tax, aggregate investment income and Schedule 7, Schedules 3, 53 and 55, and SR&ED claims;
• your final review of the whole return before you file it.

Ledger shows no tax figure for a CCPC with aggregate investment income: the refundable tax on that income is not computed, so the return stays blocked in Ledger and you prepare it in your tax software.

Before you file

• Review the workpaper with your accountant.
• File through CRA-certified software or your accountant. Ledger does not e-file the T2.
• After filing, select Mark as filed and enter the CRA confirmation number.