Budget 2026: May 15 and the $7,500 instalment threshold for the self-employed
Budget 2026 (tabled November 5, 2026) changes four dates and thresholds that matter to people with business income. It moves the T1 filing and balance-due date to May 15. It raises the instalment threshold from $3,000 to $7,500. It allows one yearly instalment for individuals whose main income is from a business. It raises the Form T1135 foreign property threshold from $100,000 to $200,000. This post walks through each measure, with two worked examples.
For the dates that apply this year, see our BC small business tax deadlines calendar. For the wider budget, read our overview of Budget 2026 for small business owners.
Key takeaways
- Budget 2026 changes the T1 filing and balance-due dates to May 15 for all individuals.
- Budget 2026 raises the instalment threshold from $3,000 to $7,500 for corporations and for individuals who live outside Quebec.
- Budget 2026 applies the instalment threshold change to taxation years that begin on or after January 1, 2028.
- Individuals whose primary source of income is from a business are allowed to make a single annual instalment payment instead of quarterly instalments.
- Budget 2026 raises the threshold for filing Form T1135 from $100,000 to $200,000.
The dates today, as the annex describes them
Under current rules, most individuals file their T1 income tax return and pay any balance owing by April 30. Self-employed individuals and their spouses or common-law partners have until June 15 to file. Any balance they owe is still due April 30.
Measure 1: May 15 for the filing and the payment
Budget 2026 changes the T1 filing and balance-due dates to May 15 for all individuals. That includes self-employed individuals and their spouses or common-law partners. Budget 2026 applies this to the 2027 and later taxation years.
Two things follow from this.
- Most individuals have 15 more days to file and pay than April 30 gives them.
- Self-employed individuals have a month less to file. Their filing date moves from June 15 to May 15. Their payment date moves from April 30 to May 15.
If you run a business, plan to close your books earlier. A June 15 habit does not fit a May 15 date. Books that are current through December make this easy.
Measure 2: the instalment threshold rises to $7,500
Most people pay tax through payroll withholding. If you earn income with no withholding, such as business income, you may have to pay tax in quarterly instalments.
Under current rules, for most individuals, instalments are required if two things are true. Your combined federal-provincial net tax owing on that income is more than $3,000 for the current year. It was also more than $3,000 for either of the two previous years. For Quebec residents, the figure is $1,800 of federal net tax owing. Corporations generally make monthly or quarterly instalments unless their total federal tax payable is $3,000 or less for either the current or previous year.
Budget 2026 raises that threshold from $3,000 to $7,500 for corporations and for individuals who live outside Quebec. For individuals in Quebec, it goes from $1,800 to $4,500. The thresholds are indexed to inflation. Any tax still owing is due on the balance-due date.
Budget 2026 applies this to taxation years that begin on or after January 1, 2028. The same test stays in place. The threshold has to be exceeded for the current year and for either of the two previous years.
Example: Maya, a realtor in Abbotsford
Maya is a sole proprietor realtor in Abbotsford. Her net tax owing on her commission income is $6,000 in the current year. It was also $6,000 in each of the two years before. That means she meets the current test, because $6,000 is more than $3,000 in all three years.
| Item | Current rules | Budget 2026, from 2028 |
|---|---|---|
| Instalment threshold | $3,000 | $7,500 |
| Maya’s net tax owing, this year and each of the two years before | $6,000 | $6,000 |
| Above the threshold in the current year and in either prior year? | Yes | No |
| Instalments required? | Yes, quarterly | No |
| When the $6,000 is paid | In instalments during the year | By the balance-due date |
Under current rules, Maya pays instalments. Under the 2028 threshold she does not, because $6,000 is below $7,500. She keeps that cash in her business for the year and pays at filing time. She still needs to set it aside. A $6,000 bill that arrives in one payment is easy to miss when the money has been spent.
The threshold is indexed, so $7,500 is a starting point and not a fixed number. We cannot say what it will be in later years.
Measure 3: one yearly instalment for business income
Under current rules, individuals whose chief source of income is from fishing or farming can make a single instalment payment. It equals two thirds of their net tax owing and is due by December 31. They pay the remainder by the balance-due date in the following taxation year.
Budget 2026 extends similar treatment to individuals whose primary source of income is from a business, including professional or commission income. They are allowed to make a single annual instalment payment instead of quarterly instalments. The payment equals two thirds of their combined federal-provincial net tax owing for the year and is due by December 31. The remainder is due on the balance-due date. Budget 2026 applies this to the 2028 and later taxation years.
Example: $12,000 of net tax owing
Take a self-employed bookkeeper whose business is her main income. Her net tax owing is $12,000 for the year, and it was also $12,000 in each of the two years before. That is above $7,500 in all three years, so instalments are required. The single payment option gives her a simpler schedule.
| Step | Date | Amount |
|---|---|---|
| Net tax owing for the year | Year end | $12,000 |
| Single instalment (two thirds) | By December 31 | $8,000 |
| Balance | On the balance-due date | $4,000 |
She makes one payment of $8,000 by December 31. She pays the other $4,000 on the balance-due date. One payment replaces four.
The two thirds is a share of the tax you owe for the year. You need a fair estimate of that number before December. This is where a mid-year review helps.
Measure 4: T1135 foreign property reporting
Under current rules, Canadian-resident individuals, corporations and trusts, as well as certain partnerships, must file Form T1135. The test is whether they own specified foreign property with a total cost of more than $100,000 at any time in a taxation year or fiscal period. Specified foreign property generally includes most types of income-earning property held outside Canada. Personal property and property used in carrying on an active business are generally not included.
Budget 2026 raises the threshold for filing Form T1135 from $100,000 to $200,000. Under Budget 2026, the CRA also raises the threshold for simplified reporting from less than $250,000 to less than $500,000. Budget 2026 applies these measures to taxation years or fiscal periods that end after 2026. See the CRA’s Form T1135 page for the form itself.
What to do now
- Check the start year for each change. They differ: 2027 for May 15, 2028 for the instalment threshold and the single instalment, and tax years ending after 2026 for T1135.
- Keep paying instalments on the schedule the CRA gave you until a change applies to you.
- Look at your prior-year net tax. If you sit between $3,000 and $7,500, the 2028 threshold may change your cash flow.
- If business income is your main income, ask whether one yearly instalment suits you better than four.
Questions about Budget 2026 and your business? Talk to us or call 778-779-4212.
Source: Budget 2026, Tax Measures: Supplementary Information. Figures are from the Budget 2026 tax annex at budget.canada.ca.
General information only. Talk to us about your situation.