Do Nonprofits Have to File Tax Returns in Canada? What Every Canadian Organization Should Know
If you run or are starting a nonprofit in Canada, you might wonder: “Do we need to file a tax return if we don’t pay taxes?” The short answer is yes. Most nonprofits do have to file a return with the Canada Revenue Agency (CRA), even if they don’t owe any tax. Here’s what you need to know, written in plain language.
What Is a Nonprofit in Canada?
In Canada, a nonprofit organization (NPO) is a group that operates for a purpose other than to make a profit. Common examples include:
- Sports clubs
- Community groups
- Social or cultural organizations
- Religious organizations that are not registered as charities
Note: A registered charity is a special type of nonprofit that has extra benefits and responsibilities. Not all nonprofits are registered charities.
Do Nonprofits Have to File a Tax Return?
Yes. Most nonprofit organizations in Canada must file a tax return every year with the CRA, even if:
- They don’t earn much money
- They are run by volunteers
- They don’t pay any taxes
Failing to file can cause problems down the road, including loss of tax-exempt status or issues with banks and funders.
Which Tax Return Do Nonprofits File?
Nonprofits that are not registered charities must file Form T1044 – Non-Profit Organization (NPO) Information Return if they meet either of these conditions:
- They earned more than $10,000 in the year from dividends, rentals, royalties and interest,
or - They owned assets worth more than $200,000 at any point in the year.
Even if a nonprofit doesn’t meet these two criteria, it might still need to file a T2 corporate tax return if it is incorporated federally or provincially (even if no tax is payable). In some cases, incorporated nonprofits file a T2 Short Return plus the T1044.
What About Registered Charities?
Registered charities in Canada do not file the T1044. Instead, they must file an annual T3010 – Registered Charity Information Return. This return is required even if the charity has no income or expenses. It includes:
- Financial information
- Activities for the year
- Information on directors and trustees
Missing this return can lead to revocation of charity status, meaning the charity can no longer issue donation receipts.
What Happens If a Nonprofit Doesn’t File?
If a nonprofit fails to file its required forms:
- The CRA may revoke its tax-exempt status.
- The organization could face penalties or fines.
- It may have trouble getting grants, funding, or even opening a bank account.
Also, late or missing filings create red flags if the organization ever wants to become a registered charity in the future.
Filing Deadlines
- T1044 and T2: Due six months after the organization’s fiscal year-end.
- T3010 (for charities): Due six months after the charity’s fiscal year-end.
Summary: Filing Rules for Canadian Nonprofits
Even if your nonprofit doesn’t make a profit, you still have legal filing responsibilities. Knowing what forms to file—and when—can help you stay in good standing with the CRA and avoid unnecessary penalties. If you’re not sure which forms apply to your group, it’s a good idea to speak with an accountant or charity lawyer familiar with Canadian nonprofit rules.
Need Help Starting or Managing a Nonprofit or Charity in Canada?
Our team helps Canadian organizations register as charities or nonprofits and stay compliant—from incorporation to annual filings. Reach out to learn more. Email us to ask@charitylawgroup.ca or call 416-488-5888. We're excited to help.
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