Have you ever sent off your tax return and then immediately had second thoughts? Here’s what to do if you make a mistake on your business tax return in Canada.

Filing your taxes can be stressful, especially when you’re filing them for your business. Mistakes can be made, and the CRA (Canada Revenue Agency) knows this. They have made the process for fixing these errors as streamlined and easy as possible!

Here’s what to do if you make a mistake on your business tax return in Canada.

Wait for an assessment notice

You cannot change your business tax return (also known as “T2”) until the CRA sends your corporation a Notice of Assessment. In this notice, the CRA (Canada Revenue Agency) will indicate that they have received your tax return and state the amount of taxes that need to be paid or refunded.

Request changes on your business tax return

Depending on the nature of your reassessment and the type of corporation, changes can be requested within three years if your business is a CCPC (Canadian-controlled private corporation) or four years if your business is not a CCPC. Extensions are available depending on your circumstances.

There are two methods you can use to request changes on your tax return.

• You can write a letter detailing your changes and mail it to your tax center. Your letter should include the corporation’s business number, name, and tax year. Be sure to include any documentation such as financial statements to support your request.
• You can make your request online using commercial Canadian tax software or sending your business tax return to the CRA in barcode format.

If you need to apply a tax credit or loss to a previous year, you will need to file one of these forms:

T2SCH4: Corporation Loss Continuity and Application

T2SCH21: Federal and Provincial or Territorial Foreign Income Tax Credits and Federal Logging Tax Credit

T2SCH31: Investment Tax Credit – Corporations

T2SCH42: Calculation of Unused Part I Tax Credit

Reviewing Your Request

The CRA will examine your request and determine if the changes should be applied to your business’s tax return. How long you will wait until the CRA processes your request depends on the type of reassessment you need. If you send in your request during the late summer or fall, the CRA may need to contact you for additional information, extending the review process. If approved, the CRA will send you a notice of reassessment detailing the changes that have been made to your income tax return. If declined, you will receive a letter from the CRA explaining why they could not make the requested changes.

If nothing else, when you ask yourself what to do if you make a mistake on your business tax return in Canada – don’t worry. If you need some help from an experienced accountant and a former CRA auditor, contact us.

E&E Professional Accountants has years of experience in assisting businesses with their accounting needs. We are founded and managed by an experienced corporate auditor and a former CRA tax auditor. Feel free to contact us for assistance with all your accounting and bookkeeping needs.