When you do not have to pay instalments

Parts I, VI, VI.1, and XIII.1

There are special situations when you do not have to pay instalments of Parts I, VI, VI.1, and XIII.1 tax.

Tax payable of $3,000 or less

You do not have to make instalment payments on your federal taxes if the total of your taxes payable under Parts I, VI, VI.1, and XIII.1 determined before taking into consideration specified future tax consequences prior to the deduction of current-year refundable tax credits, for either the current or previous year, is $3,000 or less.

If your Part XII.3 tax is $3,000 or less in the current or previous year, you do not have to make instalment payments on this tax.

Similarly, you do not have to make instalment payments on your provincial or territorial taxes if the total of your provincial or territorial taxes for the current or previous year is $3,000 or less; however, you have to pay your balance of corporation tax, if any, on your balance due date.

New corporations

Except for Part XII.I tax, you do not have to make instalment payments for a new corporation until you have started your second year of operation. However, for your first year of operation, you have to pay any tax you owe on or before your balance due date for that tax year.

Note
You may have to start making instalment payments for your second year even before you pay your balance due or file your first return. To help us allocate your first payment to the correct year-end, you can contact the CRA to have your tax year-end created before you make the first payment. Otherwise, the system will allocate your first payment to a December 31 year-end.

Your first tax year should start on your incorporation date. If you start your tax year after this date, it may affect your requirement to make instalments later.

Short tax year

Your tax year may be less than 12 months. If so, you have to pay one-twelfth or one-tenth of your tax each complete month in the tax year, depending on which calculation option you choose. If you are an eligible small CCPC, you have to pay one-quarter or one-third of your tax each complete quarter in the tax year.

You do not have to make an instalment payment for a tax year that is shorter than one month, or in the case of an eligible small CCPC, shorter than one quarter.

The tax you did not pay in instalments is due on your balance due date.

Part XII.1 tax

Unlike some other taxes, you do have to make instalment payments equal to one-twelfth of the tax payable under Part XII.1 each month in the tax year, even if your Part XII.1 tax is $3,000 or less in the current or previous year.

Forms and publications

• Corporation Instalment Guide (T7B-CORP)