Year-End Tax Planning 2026: The December 31 Checklist for Incorporated Business Owners

Year-end tax planning 2026: what is different this year

For an owner-manager, most of the tax decisions for 2026 have to be made by Thursday, December 31, 2026: how much salary or bonus you take out of the corporation, which dividends are paid this year, which investments you sell, and which donations you make. After that date only a few moves remain, chiefly the RRSP contribution (due Monday, March 1, 2027) and paying a bonus your corporation has already accrued.

The rules for the 2026 year-end are the ones already in force. The federal budget tabled on November 5, 2026 added several proposals, but none of them changes a December 31, 2026 deadline:

• A single May 15 filing and payment date for individuals is proposed from the 2027 tax year. Your 2026 personal return still follows the April 30, 2027 date (June 15, 2027 for filing if you or your spouse or common-law partner are self-employed). See the May 15 tax deadline proposal.
• The Canada Growth Incentive, a proposed capital gains exemption of up to $15 million, would apply only to qualifying shares issued on or after November 5, 2026 and held for at least 36 months. It does not shelter a 2026 sale. See our Canada Growth Incentive guide.
• Higher instalment thresholds ($7,500 instead of $3,000 for corporations and for individuals outside Quebec) and an optional single annual instalment for self-employed individuals are proposed for 2028 and later years. The December 15, 2026 instalment is unchanged.
• The Productivity Mega Deduction, announced September 15, 2026 for property acquired on or after that date, is still a proposal: as of November 11, 2026 it has been released as draft legislation, not passed as a bill. See what is law and what is proposed.

All of these are budget proposals. They become law only once Parliament passes the legislation and it receives Royal Assent. Plan 2026 around the current rules.

Source: Budget 2026: Tax Measures, Supplementary Information.

Year-end tax deadlines for 2026 and early 2027

The dates below assume a corporation with a December 31, 2026 year-end and an owner who is not self-employed outside the corporation. If a date falls on a Saturday, Sunday or public holiday, the CRA treats a payment or return as on time if it receives it on the next business day.

For other year-ends, use our corporate tax deadlines calendar.

The 2026 numbers that drive year-end decisions

Sources: CRA: MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and YAMPE; CRA: CPP contribution rates, maximums and exemptions; CRA: Corporation tax rates; CRA: Interest rates for the fourth calendar quarter, 2026.

Salary vs dividend: settle the 2026 mix before December 31

Salary, bonus and dividends are taxed to you in the calendar year they are paid, so the 2026 mix is fixed on December 31. Three numbers anchor the decision:

• $196,612 of 2026 salary creates the full $35,390 of 2027 RRSP room. Dividends create no RRSP room. See RRSP limit 2027.
• $74,600 of 2026 salary (the YMPE) earns the maximum base CPP contribution of $4,230.45 from you and the same from the corporation. Salary up to $85,000 also attracts CPP2. See CPP, CPP2 and EI explained.
• $500,000 is the federal business limit: active business income above it is taxed in the corporation at the general rate, which is often the point where paying out more salary or bonus is worth testing.

The trade-off runs both ways. Salary is deductible to the corporation and builds RRSP room and CPP, but costs payroll contributions on both sides. Dividends cost no CPP, but are paid from after-tax corporate income. Our salary vs dividends guide walks through the comparison.

Accrue a bonus, pay it within 180 days

A corporation can deduct a bonus in 2026 that it pays in 2027, as long as the bonus is paid within 180 days after its year-end (Income Tax Act, subsection 78(4)). For a December 31, 2026 year-end, the last day is Tuesday, June 29, 2027. You are taxed on the bonus in 2027, the year you receive it, so this moves the corporate deduction into 2026 and your personal tax into 2027. Source deductions apply when the bonus is paid.

Source: Income Tax Act, section 78.

Corporate year-end moves

Watch passive income and the small business deduction

A CCPC's $500,000 business limit is reduced when the corporation and its associated corporations together earn between $50,000 and $150,000 of adjusted aggregate investment income, and it is nil above $150,000. The test uses the investment income of the taxation year that ended in the previous calendar year, so gains a holding company realizes in 2026 can cut the 2027 small business deduction. Timing a large sale of a corporate investment portfolio is a year-end decision. See the small business deduction limit explained.

Put equipment into use before year-end

Capital cost allowance is claimed when property becomes available for use, not when it is ordered. A machine that is paid for in December but not delivered or installed until January is generally a 2027 claim. Immediate expensing already in law under Bill C-15 covers manufacturing and processing machinery and equipment, clean energy equipment and zero-emission vehicles; the broader Productivity Mega Deduction is not law yet, so do not book a 2026 write-off on the strength of it.

Clear shareholder loans

If you borrowed from your corporation, the loan is generally included in your income unless it is repaid within one year after the end of the corporation's taxation year in which it was made, and the repayment is not part of a series of loans and repayments. For a loan made during a 2025 taxation year that ended December 31, 2025, the repayment deadline is December 31, 2026. While the loan is outstanding, interest below the prescribed rate (3% in Q4 2026) is a taxable benefit. See shareholder loans: the CRA rules owners get wrong.

Source: Income Tax Act, section 15.

Personal year-end moves

Tax-loss selling

A capital loss offsets capital gains of the same year, and net capital losses can be carried back three years or forward indefinitely against capital gains. To count in 2026, the sale needs to settle in 2026. Canadian equity trades have settled one business day after the trade date (T+1) since May 27, 2024, so plan to trade no later than December 30, 2026 and check your broker's year-end cut-off.

Watch the superficial loss rule: the loss is denied if you, or a person affiliated with you (including your spouse or common-law partner, or a corporation either of you controls), buy the same or identical property in the period from 30 days before to 30 days after the sale and still hold it at the end of that period. Selling in your personal account and having your holding company buy the same shares back is caught.

Sources: CRA: Capital losses and deductions; Canadian Securities Administrators: move to T+1 settlement.

RRSP, TFSA and FHSA

• RRSP: contributions made by March 1, 2027 can be deducted on your 2026 return. If you turn 71 in 2026, your own contribution must be made by December 31, 2026.
• TFSA: the 2026 dollar limit is $7,000. The 2027 limit had not been published by the CRA as of November 11, 2026.
• FHSA: participation room is $8,000 a year to a lifetime $40,000, and unused room carries forward up to $8,000. Room is measured by contributions made in the calendar year, so a 2026 contribution must be made by December 31.

Sources: CRA: Important dates for RRSPs; CRA: Contributing to your FHSA.

Donations

An individual claims donations made from January 1 to December 31 of the year, plus unclaimed donations from the previous five years. A gift made on January 2, 2027 is a 2027 donation. A corporation deducts donations made in its own taxation year and can carry unused amounts forward five years.

Edge cases owner-managers get wrong

• Non-December corporate year-ends. The 180-day bonus window, the balance-due date and the T2 deadline all count from the corporation's own year-end. Your personal tax still runs on the calendar year, so a bonus a September 30, 2026 year-end corporation pays you in January 2027 is 2027 income to you.
• Associated corporations. Associated CCPCs share one $500,000 business limit, allocated on Schedule 23, and their passive income is combined for the $50,000 test. An operating company and a holding company you control are usually associated.
• Short taxation years. If a corporation's taxation year is shorter than 51 weeks, for example the first year after incorporation or a year-end change, the business limit is prorated by days in the year over 365.
• Two employers, two CPP maximums. If you draw salary from two corporations, each employer deducts CPP as if it were your only employer. You can recover your own overcontribution on your return; the employer share is not refunded.
• Bonuses declared but never paid. A bonus still unpaid on day 180 is deductible only in the year it is paid. Book the accrual, then put the payment date in the calendar.

Source: CRA: T2 Corporation Income Tax Guide, chapter 4.

Year-end tax planning questions

What is the deadline for year-end tax planning in 2026?

December 31, 2026 for most moves: salary, bonus and dividends paid, donations, FHSA contributions and investment sales. The main exceptions are RRSP contributions for 2026 (March 1, 2027) and a bonus accrued by your corporation at its year-end (paid within 180 days).

Does Budget 2026 change anything for my 2026 taxes?

Not for the 2026 year-end. The Budget 2026 measures are proposals, and the ones owner-managers ask about most, the May 15 deadline, the higher instalment thresholds and the Canada Growth Incentive, start with later years or with shares issued after November 5, 2026.

Should I pay myself salary or dividends for 2026?

It depends on your RRSP and CPP goals, your corporation's income relative to the $500,000 business limit, and your other income. Salary of $196,612 creates the full 2027 RRSP room; dividends create none. Run both scenarios before December 31.

When is my corporation's tax for 2026 due?

For a December 31, 2026 year-end, the balance is due two months after year-end (February 28, 2027, a Sunday, so a March 1 payment is on time) or three months after (March 31, 2027) for a CCPC that qualifies. The T2 return is due June 30, 2027.

Key takeaways

• December 31, 2026 is the deadline for salary, dividends, donations, FHSA contributions and loss selling; March 1, 2027 for 2026 RRSP contributions.
• $196,612 of 2026 salary earns the full $35,390 of 2027 RRSP room; $74,600 earns the maximum base CPP.
• A bonus accrued at December 31, 2026 must be paid by June 29, 2027 to keep the 2026 deduction.
• Budget 2026 proposals, including the May 15 deadline, the Canada Growth Incentive and the Productivity Mega Deduction, do not change the 2026 year-end.

RN Canada prepares personal and corporate tax returns and runs payroll for owner-managed businesses, from offices in Edmonton and Vancouver and remotely across Canada. If you want your 2026 salary and dividend mix reviewed before December 31, contact our team or see our corporate and personal tax services.