What Is a T2 Nil Return?

The basics: what makes a return "nil"

Every corporation incorporated in Canada — federally or provincially — is required to file a T2 Corporation Income Tax Return for every tax year, even if it had no activity. When a corporation reports zero revenue, zero expenses, no payroll, no asset activity, and no changes to share capital beyond the original issuance, its T2 is considered a "nil" return.

The form is the same one a fully active corporation files (T2 Return, with Schedules 100, 125, 141), but with all financial fields reporting zero. The CRA still wants the return because it confirms the corporation existed and didn't carry on business — important for keeping your corporation in good standing.

Who needs to file a T2 nil return?

You must file a T2 nil return if your corporation:

• Is incorporated in Canada and is still legally active (not dissolved)
• Had no revenue and no expenses during the tax year
• Had no payroll, dividends paid, or shareholder loans
• Had no asset purchases, sales, or changes to share capital

This is most common with holding companies, dormant numbered corporations, and corporations set up for a future project that hasn't started yet. If your corporation has been incorporated but never operated, you still owe a return for every year it has existed.

What if my corporation had a small amount of activity?

Any revenue, any expense, any dividend — even one — disqualifies you from a true nil return. You'll need a regular T2 (or, for very small corporations meeting CRA criteria, a T2 Short Return). If you're unsure, get a quick review before filing.

Schedules included in a T2 nil filing

• Schedule 100 — Balance Sheet Information (typically just opening share capital)
• Schedule 125 — Income Statement (all zeros)
• Schedule 141 — Notes Checklist confirming financial statements were prepared

Why filing matters even when there's nothing to report

If you skip a nil return, the CRA can assess late-filing penalties, issue a demand-to-file notice, and refer your corporation for involuntary dissolution. Filing on time keeps your corporation in good standing and protects your director's record.

How long does it take to file?

For a true nil return with complete information, NilTaxReturn files within 72 hours of receiving your documents. Doing it yourself can take 4–8 hours of reading CRA guides; using a traditional accountant typically costs $400–$800 and takes 1–2 weeks.