Guide to the Alberta AT1 Corporate Tax Return: What

Introduction to the Alberta AT1 Corporate Tax Return

Quick tip: download the official SCHEDULE 1 first, then fill it while following this guide: Download SCHEDULE 1 from CRA tax package.

If you've started a corporation in Alberta, congratulations on taking this important entrepreneurial step as a newcomer to Canada! One of your key responsibilities as a business owner is filing the Alberta Corporate Income Tax Return (AT1). Unlike most other provinces where corporate income tax is administered by the Canada Revenue Agency (CRA), Alberta administers its own corporate income tax through Tax and Revenue Administration (TRA), a division of Alberta Treasury Board and Finance.

This means that if your corporation operates in Alberta, you must file two separate corporate tax returns: the federal T2 Corporate Income Tax Return with the CRA, and the provincial AT1 return with Alberta TRA. This guide will walk you through everything you need to know about the AT1 return.

Who Must File an AT1 Return?

You must file an Alberta AT1 Corporate Income Tax Return if your corporation:

• Has a permanent establishment in Alberta at any time during the tax year
• Is incorporated or registered in Alberta, even if it has no permanent establishment in the province
• Had any taxable income allocated to Alberta during the tax year

A "permanent establishment" generally means a fixed place of business, such as an office, warehouse, factory, or any place where employees work regularly. Even a home office can qualify as a permanent establishment if it is your corporation's principal place of business.

Alberta Corporate Tax Rates

Understanding Alberta's corporate tax rates will help you plan your business finances. As of the current tax year, Alberta's rates are:

• General corporate rate: 8% on active business income above the small business threshold
• Small business rate: 2% on the first $500,000 of active business income for Canadian-controlled private corporations (CCPCs)

These provincial rates are in addition to federal corporate tax rates (15% general, 9% small business). Alberta's combined federal-provincial rates are among the lowest in Canada, making the province an attractive place for newcomers to start businesses.

Key AT1 Forms and Schedules

The AT1 return consists of the main return form plus several schedules. Here are the most important ones:

AT1 – Alberta Corporate Income Tax Return (Main Form)

This is the primary form where you report your corporation's Alberta taxable income and calculate the provincial tax owing. You can download it from the Alberta TRA website.

AT1 Schedule 1 – Alberta Small Business Deduction

If your corporation qualifies as a CCPC, use this schedule to claim the small business deduction, which reduces your tax rate from 8% to 2% on the first $500,000 of active business income.

AT1 Schedule 7 – Alberta Capital Cost Allowance (CCA)

Use this schedule if Alberta's CCA rules differ from federal rules for certain asset classes.

AT1 Schedule 12 – Alberta Foreign Investment Income Tax Credit

If your corporation earned foreign investment income, this schedule calculates the provincial foreign tax credit.

AT1 Schedule 14 – Alberta Innovation Employment Grant

This schedule is used to claim the Innovation Employment Grant (IEG), which replaced the former Scientific Research and Experimental Development (SR&ED) provincial tax credit.

Step-by-Step Guide to Filing Your AT1 Return

Follow these steps to ensure your AT1 return is completed accurately:

Step 1: Complete Your Federal T2 Return First

The AT1 return relies on information from your federal T2 Corporate Income Tax Return. You should prepare your T2 return before starting the AT1. Key figures you'll need include:

• Net income (loss) for tax purposes from the T2
• Taxable income from Schedule 4 of the T2
• Income allocated to Alberta from Schedule 5 of the T2

Step 2: Gather Your Documents

Before you begin filling out the AT1, gather the following:

• Your completed federal T2 return and all schedules
• Your corporation's financial statements
• Your Alberta corporate account number (starts with "AT")
• Records of any Alberta-specific tax credits you plan to claim

Step 3: Calculate Alberta Taxable Income

On the AT1 main form, you'll start with your federal taxable income and make Alberta-specific adjustments. The most common adjustments include:

1. Transfer the taxable income from your T2 return
2. Apply the allocation percentage from federal Schedule 5 to determine the portion of income taxable in Alberta
3. Make any Alberta-specific additions or deductions

Step 4: Calculate the Tax

1. Apply the general rate of 8% to your Alberta taxable income
2. If eligible, complete AT1 Schedule 1 to claim the small business deduction
3. Calculate any applicable tax credits using the relevant schedules
4. Determine your net Alberta corporate tax payable

Step 5: File the Return

You can file your AT1 return in several ways:

• Electronically through Alberta's Net File system – This is the preferred method. Visit alberta.ca for details
• By mail – Send your completed AT1 return to: Tax and Revenue Administration, P.O. Box 1470, Edmonton Main, Edmonton, AB T5J 2N5
• Through compatible tax software – Many commercial tax preparation programs can file both the T2 and AT1 simultaneously

Filing Deadlines and Penalties

Your AT1 return is due six months after your corporation's fiscal year-end. For example, if your fiscal year ends on December 31, 2025, your AT1 is due by June 30, 2026.

However, any tax balance owing is due two or three months after the fiscal year-end (depending on your corporation's size), not six months. Late filing penalties include:

• 5% of the unpaid tax at the filing deadline
• Plus 1% per month for each full month the return is late, up to 12 months
• Interest on unpaid balances at prescribed rates

Alberta-Specific Tax Credits for Newcomer Entrepreneurs

Alberta offers several tax credits that may benefit your corporation:

• Innovation Employment Grant (IEG): An 8% grant on eligible R&D expenditures incurred in Alberta, replacing the former SR&ED provincial credit
• Alberta Investor Tax Credit (AITC): A 30% tax credit for investments in eligible Alberta small businesses (for investors in your company)
• Interactive Digital Media Tax Credit: A 25% tax credit on eligible labour costs for interactive digital media products developed in Alberta
• Film and Television Tax Credit: Credits for eligible production costs incurred in Alberta

Common Mistakes Newcomers Make with the AT1

Avoid these frequent errors:

• Forgetting to file the AT1 separately – Unlike most provinces, Alberta requires its own return. Filing your federal T2 does not cover your Alberta obligations
• Using the wrong allocation formula – If your corporation operates in multiple provinces, you must correctly allocate income to Alberta using the revenue and salary formula
• Missing the payment deadline – Remember that the payment due date (2-3 months after year-end) is earlier than the filing deadline (6 months)
• Not registering for an Alberta corporate account – You need a separate Alberta account number. Register at alberta.ca

Instalments and Payments

If your corporation's Alberta corporate tax for the current or preceding year exceeds $2,000, you are required to make monthly instalment payments. Instalments are due on the last day of each month during your fiscal year. You can pay through:

• Online banking – Add Alberta TRA as a payee using your AT account number
• Alberta's electronic payment system – Through the TRA website
• Cheque by mail – Payable to the Government of Alberta

Getting Professional Help

As a newcomer, you may find it beneficial to work with a Chartered Professional Accountant (CPA) who is familiar with both federal and Alberta corporate tax requirements. While it's an additional cost, a CPA can help you:

• Ensure your returns are filed correctly and on time
• Maximize available tax credits and deductions
• Set up proper instalment payment schedules
• Plan your corporate tax strategy for future years

You can find a CPA through the CPA Alberta website or through newcomer business support organizations in your community.

Resources and Contact Information

For further assistance with your AT1 return:

• Alberta TRA website: alberta.ca/corporate-income-tax
• TRA phone: 780-427-3044 (Edmonton) or toll-free 310-0000 then 780-427-3044
• CRA (for federal T2): 1-800-959-5525
• WelcomeAide: Visit welcomeaide.com for more business guides for newcomers

Starting a corporation in Alberta as a newcomer is an exciting journey. Understanding and meeting your tax obligations, including filing the AT1 return on time, is a critical part of building a successful business in Canada. Take advantage of the resources available to you, and don't hesitate to seek professional help when needed.

Download This Form

Before you submit anything, download the latest official file here: Download SCHEDULE 1 from CRA tax package. Always use the latest version.

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Official external resources

• Download SCHEDULE 1 from CRA tax package
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• GST/HST for Businesses