Paper Filing? Here’s What It Could Cost You

An important reminder of the penalties associated with paper filing tax returns when electronic filing is required.

Corporations (T2 Returns):

Corporations that are required to file their T2 corporate income tax returns electronically but file on paper may be subject to a penalty of $1,000 for each failure to comply with the electronic filing requirement.

Trusts (T3 Returns):

Trust that are required to file a T3 return electronically (for example, because the trust is a “prescribed entity” or because the Minister has specified electronic filing for that type of return), but file on paper may be subject to a penalty of $1,000 for each such failure.

Individuals:

At present, individuals are generally not subject to a mandatory electronic filing requirement for their personal income tax returns (T1). 

These penalties are assessed per return and are in addition to any penalties that may be assessed against the taxpayer (corporation or trust) itself for failing to file in the required manner.

Contact your Manning Elliott advisor if you have any questions.