T3 Tax Return: Who Files, Deadlines, and Schedule 15

A T3 trust income tax and information return reports a Canadian trust’s income, deductions, credits, and — since 2024 — the identities of everyone connected to the trust, and it is due within 90 days of the trust’s taxation year-end. For most trusts, that means a March 31 deadline. The rules changed materially starting with the 2024 tax year, so a trust that never had to file before may owe a return now even with no income and no tax payable.

Who Has to File

Section 150 of the Income Tax Act requires a trust to file a T3 return within 90 days of the end of its taxation year.¹ The obligation applies to both testamentary trusts (created on death) and inter vivos trusts (created during a person’s lifetime). A trust generally has to file if any of the following are true for the year:²

Total income from all sources is more than $500.
The trust allocated income or capital to a beneficiary.
The trust disposed of capital property.

Starting with the 2024 tax year, most express trusts resident in Canada must file even when they have no income and owe no tax. The “no tax payable” exemption no longer applies to express trusts, so the mere existence of the trust can be enough to trigger a return.¹ Bare trusts got a reprieve: the CRA has confirmed that bare trusts do not have to file a T3 return or Schedule 15 for taxation years ending in 2025.³ For taxation years ending on or after December 31, 2026, certain “reportable bare trusts” will have to file under subsection 150(1.3), and the CRA has said it will publish more guidance before that filing season.⁴

When the Return Is Due

The T3 return, the related T3 slips, and the T3 Summary are all due no later than 90 days after the trust’s taxation year-end. Most trusts have a December 31 year-end, which puts the deadline at March 31 (April 1 in a leap year). Beneficiaries also need their T3 slips by that date so they can report the income on their personal returns.⁵

Graduated rate estates are the exception. An estate can choose a non-calendar fiscal year-end, giving the executor flexibility over the first return period. The 90-day window still applies, measured from whatever year-end the estate selects.⁵

What You Need Before You Start

The starting point is the document that created the trust — the trust deed or the will. The legal name on the T3 return has to match that document exactly, or the CRA may reject the filing. You also need the trust account number assigned by the CRA, the Social Insurance Number of every individual beneficiary, and the Business Number of any corporate beneficiary.²

If the trust doesn’t have an account number yet, apply online through My Account, My Business Account, or Represent a Client, or mail Form T3APP to the address specified on the form.⁶ Apply early. Without an account number you cannot file electronically, and paper processing is slower.

Income must be reported by type. Interest, Canadian dividends, foreign income, capital gains, and other income each go on separate lines. You then allocate portions of each type to beneficiaries on T3 slips, and the slip totals have to reconcile with the amounts on the main return. Each beneficiary uses their slip to complete their own tax return.

Schedule 15 and the Listed-Trust Exemptions

For taxation years ending on or after December 31, 2025, most trusts have to file Schedule 15, Beneficial Ownership Information of a Trust, along with the T3. Schedule 15 requires the name, address, date of birth, country of residence, and taxpayer identification number of every settlor, trustee, beneficiary, and any person with a power to influence the appointment of trust income or capital. In later years, you only report changes from the prior Schedule 15.

Not every trust has to complete Schedule 15. The Income Tax Act sets out a long list of “listed trusts” that are exempt.¹ Common exemptions include:

Trusts that have existed less than three months at year-end.
Trusts holding no more than $50,000 in assets throughout the year, where those assets are limited to cash, GICs, publicly listed securities, mutual fund units, or similar instruments.
Small family trusts under $250,000 in assets, where every trustee and beneficiary is an individual, every beneficiary is related to every trustee, and holdings are limited to the asset types above plus personal-use property and exempt life insurance policies.
Trusts governed by RRSPs, RRIFs, TFSAs, RESPs, RDSPs, first home savings accounts, registered pension plans, deferred profit sharing plans, and pooled registered pension plans.
Graduated rate estates and qualified disability trusts.
Registered charities, mutual fund trusts, and employee life and health trusts.
Professional trust accounts holding funds under professional conduct rules or provincial law, not maintained for a particular client, and limited to cash and GICs worth $250,000 or less.

The complete list is longer. If you aren’t sure the trust qualifies for an exemption, the safer move is to file Schedule 15 rather than risk a penalty for skipping it.

How Trust Income Gets Taxed

A trust is treated as its own taxpayer, but section 104 lets the trust deduct income that becomes payable to beneficiaries in the year.⁷ Those beneficiaries then pay tax on the income on their own returns. Income the trust keeps is taxed inside the trust.

The rate on retained income depends on the type of trust. Graduated rate estates and qualified disability trusts pay at the same graduated rates that apply to individuals. Every other trust pays a flat federal rate of 33% — the top individual rate — on all its taxable income, with provincial tax on top.² That is why trustees, where the trust deed allows it, generally push income out to beneficiaries in lower brackets.

Graduated rate estate status is available only to the estate of a deceased individual, and only for 36 months after death. The estate has to designate itself as a graduated rate estate in its first T3 return and include the deceased’s Social Insurance Number.⁸ Only one estate per deceased person can claim it. After 36 months, the estate loses graduated rates and pays 33% on retained income.

Trusts also face a 21-year deemed disposition. Under subsection 104(4), a trust is treated as having sold and immediately reacquired all its capital property at fair market value every 21 years, forcing recognition of accrued gains. A trust holding appreciated real estate or investments can face a large tax bill on that anniversary even though nothing was actually sold. Planning for it should start well before the date arrives.

How to Submit the Return

There are two ways to file: electronically through EFILE, or on paper by mail.

EFILE

T3 returns can be filed electronically using CRA-certified tax software through the EFILE system.⁹ A tax preparer who files more than five trust returns of the same type has to use EFILE. Paper returns above that threshold can attract a $25-per-return penalty.¹⁰

Not every return qualifies for EFILE. The CRA excludes amended returns, returns for tax years ending before 2021, returns for trusts without account numbers, and voluntary disclosure applications, among others.⁹ Those have to go on paper.

One point of confusion worth flagging: you cannot file a T3 through My Account or Represent a Client. Those portals let you register a trust account, manage direct deposit, and submit documents, but the return itself has to go through EFILE software or by mail.¹⁰

Paper

The CRA publishes fillable PDF versions of the T3 return, including large-print versions, on its website.¹¹ The completed package — the return plus all T3 slips — goes to the tax centre designated for the trust’s geographic location. The CRA issues a notice of assessment once it processes the return.

Penalties and Interest for Late or Wrong Returns

The Income Tax Act imposes several distinct penalties, and they apply to different failures.

When a trustee fails to file a return required under subsection 150(3), the penalty is $10 per day of default, to a maximum of $50.¹² That is the penalty aimed specifically at trustees and legal representatives who neglect their filing duty.

A broader penalty applies when a trust misses the deadline for an information return. Under subsection 162(7), the penalty is the greater of $100 or $25 per day the failure continues, up to 100 days, capping at $2,500. Subsection 162(7.01) sets a scaled structure for filers with large numbers of information returns, ranging from $10 per day (fewer than 51 returns) to $75 per day (more than 10,000 returns).¹²

Where a return contains a false statement or omission made knowingly or through gross negligence, section 163(2) imposes a penalty equal to the greater of $100 or 50% of the tax that was understated.¹³ That is the expensive one.

The CRA also charges compound daily interest on any unpaid tax. For the first two quarters of 2026, the prescribed rate on overdue taxes is 7%.¹⁴ The rate is updated quarterly, so check the CRA site if you are filing later in the year.

Get a Clearance Certificate Before Distributing Anything

This is the step trustees skip most often, and the one that can cost them personally. Under subsection 159(2), a trustee has to obtain a clearance certificate from the CRA before distributing the trust’s property.¹⁵ The certificate confirms that all taxes, interest, penalties, CPP contributions, and EI premiums owed by the trust have been paid, or that the CRA has accepted security for what remains owing.

Distribute without the certificate and subsection 159(3) makes you personally liable for the unpaid amounts, up to the value of what you handed out.¹⁵ The CRA can assess you at any time. Trustees who wind up an estate and pay everything out before the final assessment arrives can find themselves writing a cheque from their own bank account.

To request the certificate, submit Form TX19 with supporting documents: a copy of the trust agreement (or will and probate documents for a testamentary trust), a detailed list of assets with adjusted cost base and fair market value, a statement of distributions made to date, and the names and Social Insurance Numbers of beneficiaries who received property other than cash.¹⁶ Don’t submit Form TX19 until the notice of assessment for the final T3 return has come back. The CRA won’t issue the certificate until every required return has been assessed and every liability settled.

1
Department of Justice. Income Tax Act – Section 150
2
Canada Revenue Agency. T3 Trust Guide – 2025
3
Canada Revenue Agency. What Has Changed – Filing a Trust’s T3 Return
4
Canada Revenue Agency. Enhanced Reporting Rules for Trusts and Bare Trusts – Frequently Asked Questions
5
Canada Revenue Agency. Filing a Trust’s T3 Return – When to File
6
Canada Revenue Agency. Application for a Trust Account Number
7
Department of Justice. Income Tax Act – Section 104
8
Canada Revenue Agency. Graduated Rate Taxation of Trusts and Estates and Related Rules
9
Canada Revenue Agency. T3 EFILE Information
10
Canada Revenue Agency. How to File a T3 Return
11
Canada Revenue Agency. T3RET T3 Trust Income Tax and Information Return
12
Department of Justice. Income Tax Act – Section 162
13
Department of Justice. Income Tax Act – Section 163
14
Canada Revenue Agency. Interest Rates for the First Calendar Quarter
15
Department of Justice. Income Tax Act – Section 159
16
Canada Revenue Agency. IC82-6R13 – Clearance Certificate