Create a T2 tax return

About once a year, we release a new T2 module. The timing of these new modules usually co-incides with a major certification by the CRA but it is not necessarily on a calendar year basis.

Each module allows you to prepare corporate tax returns for a tax years ending during a certain period. However, usually these periods overlap from module to module.

Choosing the right module year

When the tax year could be prepared in more than one module, TaxCycle automatically chooses the best one to use.

1. When you create a new return, you'll be asked to enter the tax year start and year end on the Start screen. TaxCycle will then create the return in the appropriate module.
2. When you carry forward a return, TaxCycle chooses the best module to use. If it is possible to prepare the return in more than one module, it will use the most recent one.
3. When you open an existing return, TaxCycle already knows which module it needs, but will display a bulletin allowing you to convert eligible files to the new module (see below).

Tax year end date not supported

If you enter year start and end dates in a T2 and the year end falls after the CRA certification period, you will see a message on the on the Tax year end date field on the Info worksheet:

A similar message will appear if you try to create a new file and enter the dates on the Start screen:

These messages appear when the corporate year falls outside of the dates for which TaxCycle T2 is certified to file returns with the CRA (and other provincial government authorities).

It is most common to see these messages when there is a gap between the certification period and an updated version of TaxCycle T2 software. If you see these message, you can continue creating the return and entering data. TaxCycle will use pro-forma calculations and rates. 

It does not generally mean your license has expired. During your license period, you get free updates to TaxCycle T2. This includes updates that extend the T2 certification. You can check to see when your license expires by going to the File menu and then clicking on Help. The date appears in the list of installed products. 

Usually, the certification is extended twice a year, around the October/November, and again in the May/June time frame.  Keep an eye out for a TaxCycle T2 software update that extends the certification and be sure to install it when it comes out. Then, you'll have the latest forms and calculations and you can file the return. 

Convert files to a new module

When we release a new TaxCycle T2 module, you may notice a bulletin when you open an in-progress T2 return. This notifies you that the returns can be upgraded to the new module:

1. A bulletin appears across the top of the form window to let you know it is possible to convert the file to the more recent module. This bulletin may also appear if you create a new return and then change the taxation year.
2. Click the link to Convert the return now, or the Convert button.
3. When the new return opens, save it. At this point, you can choose to retain the old file, or delete it. Deleting it means that it will no longer appear in the Client Manager.
4. If you click the Dismiss button, the message goes away for as long as you have the file open. You can still find it in the Review sidebar, under the Require Attention or Bulletins views. The next time you open the file, the bulletin will return. Click the checkmark next to the message in the sidebar to sign off the bulletin so it does not reappear.

T2 file name extensions

In TaxCycle T1, the file name extension matches the year of the tax return module that you are creating. Returns prepared for the 2019 tax year have the extension 2019T1. 

Because corporation tax years do not have to follow the calendar year, T2 modules are certified based on what corporate year-ends you can file. T2 modules usually include more than one calendar year, and they usually overlap. 

This makes our job of choosing a unique file name extension tricky. We have chosen to use the year that the module was first released, as we usually only release a new T2 module once a year. Take a look at the list below to see which tax years fall under which file extensions

Don't be concerned if you're preparing a 2015 return, but it shows up with the .2018T2 or .2019T2 file name extension. TaxCycle T2 chooses the best module for filing the corporation's return.

Dates in file names and file extensions

If you see a year that appears after the dot in the file name, it is a file name extension. A file name extension are the letters and numbers that appear after the dot in the file name. Don't worry too much about this date as it is designed to match the module (see above). 

In TaxCycle, we usually show the file name extension when we show the file name. You can see it in the top menu bar of the program and in the Client Manager. So, you may notice the year there, but it may not match the year of the corporate tax year.

If you want to see the full corporate year end date in the name of the return, you can set that in Options. Go under T2, then click on File Naming to configure the year in the file name.