Every Alberta corporation files a federal T2 corporate return with the Canada Revenue Agency. That fact is well-understood. What a surprising number of Alberta business owners do not fully appreciate is that they also file a separate, parallel corporate income tax return with an entirely different government authority — Alberta's own Tax and Revenue Administration (TRA). That return is the AT1.
The AT1 is not a schedule inside the T2. It is not a provincial addendum that your accountant submits as a formality. It is Alberta's own corporate income tax return, governed by the Alberta Corporate Tax Act (ACTA), administered by Alberta TRA, and subject to its own filing deadlines, penalties, credits, and now — for tax years beginning after December 31, 2024 — a mandatory e-filing requirement.
The conflation of the AT1 and the T2 is one of the most common sources of compliance gaps and missed planning opportunities in Alberta corporate tax. This piece is a plain-language explainer: what the AT1 is, how it differs from the T2, what the e-file mandate means in practice, and which provincial-only credits can only be claimed through the AT1.
The AT1 and the T2: what makes them distinct
Both returns share a common foundation — they start with the same accounting income — but they diverge almost immediately in the calculation of taxable income, credits, and tax payable.
Governing law and administrator:
- T2: federal Income Tax Act; administered by CRA.
- AT1: Alberta Corporate Tax Act; administered by Alberta TRA.
Tax rates applied:
- T2: federal corporate tax rates (currently 15% general / 9% SBD on first $500k of active business income).
- AT1: Alberta provincial rates (currently 8% general / 2% SBD on the first $500,000 of active business income per associated group).
Provincial-only credits: The AT1 is the only place where Alberta-specific tax credits can be claimed. The two most significant for Alberta SMBs are:
- Innovation Employment Grant (IEG) — claimed on AT1 Schedule 29. A refundable credit paying 8% on R&D expenditures up to the corporation's base spending level and 20% on incremental above-base spend. Made permanent in Budget 2025. (Note: IEG eligibility is tied to federal SR&ED-qualifying expenditures incurred in Alberta, and TRA verifies this against CRA's technical determination — but the credit itself is claimed on the AT1, not the T2.)
- Agri-Processing Investment Tax Credit (APITC) — claimed on AT1 Schedule 3. A 12% non-refundable credit for qualifying capital investments of $10 million or more in Alberta agri-processing facilities.
Neither of these credits appears anywhere on the federal T2. An Alberta corporation that qualifies for the IEG but does not file the AT1 correctly — or whose preparer does not complete Schedule 29 — loses the credit entirely.
Loss carryovers and installments: Alberta maintains its own loss carryforward and carryback records separately from CRA; a federal reassessment does not automatically conform the AT1 position. Federal installments go to CRA; Alberta installments go to TRA — they are separate accounts with separate interest calculations.
The mandatory e-filing requirement: what changed and what it means
Effective for AT1 returns for taxation years beginning after December 31, 2024, all corporations must file their AT1 electronically via Alberta TRA's net file service, with a small number of exceptions.
Who is exempt from e-filing: The mandatory e-file requirement does not apply to insurance corporations, non-resident corporations, corporations reporting in functional currency, and corporations exempt from tax under section 35 of the ACTA.
Who must e-file: Everyone else — including corporations below any gross revenue threshold. The prior exception for corporations below $1 million in gross revenue has been removed. For a corporation with a January 1, 2025 or later year-start, there is no paper option.
The penalty: A corporation that fails to file the AT1 electronically when required is liable to a $1,000 penalty. This is an administrative penalty — it is not tied to any tax owing and applies regardless of whether the return itself is correct and timely on a substance basis.
The practical implication: If your tax preparer has historically filed the AT1 on paper, confirm before this filing season that they have updated to net file. The obligation is on the corporation, not the preparer. Confirming the workflow is not a check your accountant should have to remind you to make — it is a compliance verification step the business owner should build into their annual process.
The filing exemption: who does not need to file an AT1 at all
Not every Alberta corporation is required to file an AT1. The filing exemption applies to corporations with gross revenue not exceeding $500,000 as disclosed in financial statements prepared for the taxation year, provided they also meet certain other conditions under the ACTA.
This exemption is narrow in practice: it applies to corporations that are already not subject to Alberta corporate income tax (for example, certain exempt corporations), not to all small corporations below $500,000 in revenue. A small profitable Alberta CCPC with $400,000 in gross revenue is generally still required to file the AT1 to report its provincial income tax.
Critically, a corporation claiming the IEG, APITC, or any other listed Alberta tax credit is NOT exempt from filing regardless of its gross revenue. The credit-claim obligation overrides the revenue-based threshold entirely. If your corporation qualifies for and intends to claim a provincial credit, you must file the AT1 — the $500,000 exemption is simply unavailable to you. Confirm with your tax advisor whether the specific exemption conditions apply to your corporation before assuming a filing obligation does not exist.
AT1 filing deadlines and installments
The AT1 filing deadline for most corporations is six months after the end of the taxation year. For a December 31, 2025 year-end, the AT1 is due June 30, 2026 — the same deadline as the T2.
Alberta corporate tax installments are paid to TRA separately from federal installments, due monthly starting one month after the taxation year begins. Confirm each year whether your corporation still meets the installment threshold rather than continuing the prior year's pattern by default.
The AT1 checklist for the current filing season
For a corporation with a December 31, 2025 year-end preparing to file the 2025 AT1:
Before filing:
- Confirm that the AT1 will be filed via net file (e-filing is mandatory for tax years beginning January 1, 2025 or later).
- Confirm the tax preparer has TRA credentials and Alberta TRA net file access.
- Confirm the AT1 is being prepared alongside the T2, not after it — some provincial adjustments require coordination with federal positions.
Income and rate calculation:
- Verify the Alberta taxable income calculation; note that some federal adjustments do not flow through directly to provincial income.
- Confirm the SBD limit allocation if the corporation is associated with other corporations — the group-wide $500,000 SBD limit must be allocated across all associated entities.
- Apply the correct rate: 2% on SBD-eligible income (first $500k of qualifying active business income), 8% on income above the SBD limit.
Provincial credits — AT1 schedules:
- Schedule 29 (IEG): If the corporation had qualifying R&D expenditures in Alberta in 2025, complete Schedule 29. Confirm CRA's SR&ED technical determination has been received or initiated before claiming the IEG.
- Schedule 3 (APITC / other credits): If the corporation made qualifying agri-processing capital investments, complete the APITC portion of Schedule 3.
- Review for any Alberta capital investment tax credits from prior years that may still have carryforward balances.
Installment reconciliation and CRA conformity:
- Reconcile Alberta installments paid against the AT1 tax liability; TRA refunds and balances owing are settled separately from the T2.
- If there were T2 amendments or CRA reassessments during 2025, confirm corresponding AT1 amendments have been or will be filed with TRA.
A note on TRA account numbers
Alberta TRA administers the AT1 under the corporation's provincial business number — distinct from the federal BN/RC account. If your corporation was recently registered in Alberta, amalgamated, or changed its name, confirm the TRA account number is current before filing.
Key takeaways
- The AT1 is Alberta's own corporate income tax return, separate from the federal T2, administered by Alberta TRA under the Alberta Corporate Tax Act — the two returns are parallel obligations, not a single filing.
- Mandatory e-filing applies to AT1 returns for taxation years beginning after December 31, 2024 — a $1,000 penalty applies to non-compliant corporations, regardless of gross revenue.
- Alberta provincial credits (IEG, APITC) are only available on the AT1 — they cannot be claimed on the T2 and are permanently forfeited if the AT1 is not correctly prepared.
- The AT1 filing exemption threshold (gross revenue not exceeding $500,000) is narrow — most Alberta CCPCs below that threshold are still required to file; confirm the specific exemption conditions with your advisor.
- Alberta installments, filing deadlines, and account numbers are managed through TRA separately from CRA — reconcile both accounts as part of the annual compliance close.
Understanding the AT1 as a distinct, equal-weight return to the T2 is not a technicality — it is the foundation of compliant and complete Alberta corporate tax management.
RN Canada Accounting & Advisory prepares and coordinates AT1 and T2 filings for Alberta corporations, including SR&ED and IEG claims on AT1 Schedule 29. If you want to confirm your e-file setup or review your 2025 AT1 before the June 30 deadline, our team can help you work through it.