When and how do SIFT partnerships pay income tax?
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When and how do SIFT partnerships pay income tax?
SIFT partnerships do not have to pay tax in monthly instalments when the Part IX.1 tax payable for either the previous year or the current year is $3,000 or less.
Similarly, you do not have to make instalment payments on your provincial or territorial taxes if the total of your provincial or territorial taxes for the current or previous year is $3,000 or less. However, you have to pay your taxes, if any, on your balance due date. If your partnership earned income from Quebec, you have to pay the Quebec provincial SIFT tax directly to that province.
The balance of tax the SIFT partnership owes for a tax year is to be paid on the filing due date of the partnership information return.
Interest and penalties apply to late payments. To be on time, you have to make your instalment and other payments on or before the due date. You can do this by mailing a cheque payable to the receiver general for Canada.
Note
Sometimes, interest and penalties on late payments can be waived or cancelled. For more information, see "Cancel or waive penalties or interest" in Guide T4068, Guide for the Partnership Information Return (T5013 forms).
Monthly instalment payments
You can calculate your monthly instalment payments using one of the following options:
Option 1 – One-twelfth of the estimated tax payable for the current tax year is due each month of the tax year.
Option 2 – One-twelfth of the tax payable from the previous tax year is due each month of the current tax year.
Option 3 – One-twelfth of the tax payable from the year before the previous tax year is due in each of the first two months of the current tax year. One-tenth of the difference between the tax for the previous tax year and the total of the first two payments is due in each of the remaining 10 months of the current tax year.
Instalment due dates
Instalment payments for Part IX.1 tax are due on the last day of every complete month of the SIFT partnership's tax year. The first payment is due one month minus a day from the starting date of the SIFT partnership’s tax year. The rest of the payments are due on the same day of each month that follows.
For more information on instalments payments, see Guide T7B-Corp, Corporation Instalment Guide.
Forms and publications
- T5013 Partnership Information Return guide T4068 and forms
- T5013-1 Part IX.1 income tax calculation – SIFT Partnerships
- Guide T7B-Corp, Corporation Instalment Guide
- Date modified:
- 2016-03-03