Tax season’s rolling around, and if you own a small business in Alberta, you might be dreading the cost of filing your corporate taxes. Between accountants charging thousands and NETFILE software fees stacking up, it’s easy to feel stuck. But here’s the good news: corporate taxes in Alberta aren’t as scary as they seem, and with a little guidance, you can file them yourself—without breaking the bank.
This guide will walk you through the basics of corporate tax filing in Alberta, focusing on the T2 Corporate Income Tax Return and the AT1 Alberta Corporate Income Tax Return.
Who Needs to File a T2 Return?
If you’ve got an incorporated business in Canada, you’re required to file a T2 Corporate Income Tax Return every year, even if you had no income. Yep, even inactive corporations still have to file. The only exceptions are registered charities and Hutterite colonies.
The T2 return is a federal tax return that every corporation in Canada must submit to the Canada Revenue Agency (CRA). The key things you need to know:
- It’s due six months after the end of your fiscal year. If your year-end is December 31, your T2 return is due by June 30.
- Even if you don’t owe any tax, you still have to file.
- If you owe taxes, the payment is due two months after your fiscal year-end (or three months if you qualify as a Canadian-controlled private corporation (CCPC) with under $500,000 in taxable income).
What’s the AT1 and Why Does It Matter?
The AT1 is Alberta’s corporate tax return, required for all corporations carrying on business in the province. Unlike some other provinces, Alberta has a separate corporate tax system—meaning you need to file your federal T2 with CRA and an AT1 with Alberta Treasury Board and Finance.
How Much Tax Will You Pay?
Alberta has one of the lowest corporate tax rates in Canada:
- Small Business Tax Rate (for CCPCs earning $500,000 or less): 2%
- General Corporate Tax Rate (for income over $500,000): 8%
The federal portion of corporate tax is 9% for small businesses and 15% for general corporate income. That means a small business in Alberta pays a combined rate of 11% (2% provincial + 9% federal).
AT1 Filing Requirements
To file your AT1, you’ll need:
- Your T2 return, because many numbers carry over.
- Your Alberta Business Number (BN) from the CRA.
- Any additional provincial tax credits you qualify for.
You can file the AT1 online through Alberta Net File or submit a paper return if you prefer.
How to File Without Spending a Fortune
Most accountants charge anywhere from $1,000 to $3,000+ for a corporate return, and NETFILE software often costs hundreds. But if your return isn’t too complex, you’ve got cheaper options:
- Ask Inclusive Solutions for help!
- Bookkeepers are different from Accountants, but we still have accounting backgrounds and can often help with straight-forward corporate tax returns.
- Use Free or Low-Cost T2 Software
- Some software providers offer free basic versions or one-time purchase options instead of expensive subscriptions.
- CRA has a list of certified T2 software, so check there first. We should note that none of the ones we found there were free, with the lowest cost being approximately $40 + an additional $40 for any extra filing requirements (e.g., $40 for the T2 + $40 for the AT1 etc).
- File Your AT1 Directly
- Alberta Treasury Board and Finance has filing tools for the AT1, so you don’t need to pay a third party.
- If you’re comfortable with numbers, you might not need software at all.
- Keep Clean Books Year-Round
- The better your bookkeeping, the easier tax season will be. (This is where Inclusive Solutions can really help you!)
- Even if you do hire an accountant, good records can cut their fees significantly since they won’t have to clean up your books.
Common Mistakes to Avoid
Filing corporate taxes yourself isn’t impossible, but there are a few traps you’ll want to steer clear of:
- Missing the filing deadline. Even if you don’t owe tax, late filing penalties can climb fast.
- Not claiming eligible deductions. Many small businesses forget about expenses like home office costs, vehicle expenses, or meals (50%).
- Ignoring installment payments. If you owe over $3,000 in tax regularly, CRA expects you to make quarterly installments, and missing them could lead to interest charges.
- Forgetting about provincial differences. Since Alberta has a separate tax system, make sure your AT1 is filed correctly—don’t assume everything carries over from the T2.
Bottom Line
Corporate taxes in Alberta don’t have to be intimidating, and they definitely don’t have to cost a fortune. If your return is simple, you can file it yourself using affordable tools and save thousands. Just make sure you keep good records, file on time, and double-check your numbers before submitting.
If you’re new to this or feeling overwhelmed, take it one step at a time. And if you’re really stuck, consider getting targeted help from Inclusive Solutions instead of full-service accounting. Additionally, some professionals offer review services for a fraction of the cost of full preparation.
At the end of the day, the more you understand about your corporate taxes, the more control you have over your business finances—and that’s always a win.
As always, it’s about your dreams, without the barriers.