What’s the deadline for filing a joint T2057 for a Section 85 rollover?
Form T2057 (the joint s. 85(1) election) is due on or before the earliest income tax return filing due date of either party (transferor or transferee) for the tax year in which the transaction occurred. Late-filing under s. 85(7) is allowed within three years with a per-month penalty of $100 (minimum $100, maximum $8,000) under s. 85(8).
Example: an Ontario sole prop with a December 31, 2025 personal fiscal year rolls assets to a NewCo on July 1, 2025. NewCo has a June 30 fiscal year-end. Personal T1 for 2025 is due April 30, 2026; NewCo’s T2 (year ended June 30, 2026) is due December 31, 2026. The earlier deadline is April 30, 2026 – T2057 must be filed by that date to be timely.
Late-filing window under s. 85(7): three years after the earliest return due date. Beyond three years, s. 85(7.1) allows a ‘special circumstances’ late election but only where ‘just and equitable’ – CRA has broad discretion to refuse. Beyond ten years the election is dead.
Penalty math: $100 per complete or partial month between the original due date and the filing date, min $100, max $8,000. Filing 20 months late = $2,000 penalty. Filing 90 months late (about 7.5 years) = $8,000 penalty cap. The penalty is paid by the corporation (usually), not by the individual.
Note: Amending a filed T2057 to change the elected amount requires CRA approval under s. 85(7.1); it is granted sparingly and typically requires a clear reason (like arithmetic error, not tax-planning regret).
Source: canada.ca â T2057 form
— Bader A. Chowdry, CPA, CA, LPA — Insight Accounting CPA
Disclaimer: Bader A. Chowdry, CPA, CA, LPA is a Licensed Public Accountant regulated by CPA Ontario. Insight Accounting CPA Professional Corporation is a Chartered Professional Accountant firm. This content is general information only and does not constitute professional advice for your specific facts. Confirm current rules and figures with your own advisor before acting.