If you are a goods and service tax/harmonized sales tax (GST/HST) registrant, your choice of the fiscal period end for income tax purposes may affect your GST/HST reporting periods, filing, and balance due dates.
You cannot use the alternative method if:
You must fill in this form and send it with your income tax and benefit return to calculate your additional business income for as long as your fiscal period does not end on December 31.
If you need to calculate an additional business income for a separate business, fill in another Form T1139 for each one.
To have a fiscal period that does not end on December 31, you have to send this form with your your income tax and benefit return as follows. If you started your business in:
If the due date falls on a Saturday, a Sunday, or a public holiday recognized by the CRA, we consider your payment to be on time if we receive it on the next business day. Your return is considered on time if we receive it or if it is postmarked on or before the next business day.
Part 2 will help you calculate your additional business income to report on your 2023 income tax and benefit return.
Once you elect to have a fiscal period that does not end on December 31, you do not have to do it again for that business.
For a final income tax and benefit return in case of death of a partner or a proprietor, complete Part 3 – Alternative method – Death of a proprietor.
For more information on amount A or if you are a partner in a partnership, see Part 7 - Notes.
Software restrictions:
Tax return for taxpayer died in 2023 or 2024 is not eligle for NetFILE and is not supported. For more information, please visit the CRA web site
Death of a partner or proprietor
In the case of the death of a partner or a proprietor, there are timing issues to consider when reporting income and completing the final income tax and benefit return.
If the partner or proprietor died after the end of the business fiscal period, his legal representative can choose to fill in an optional income tax and benefit return. This means the representative will fill in two sets of returns and two T1139 forms for the 2023 year:
Final income tax and benefit return for the regular fiscal period and this form
In this case, the final income tax and benefit return includes the business income from the regular fiscal period and all other income. The legal representative fills in the financial statements and this form. Fill in the form for the regular fiscal period as follows:
The optional income tax and benefit return includes the business income for the short fiscal period. The legal representative fills in the financial statements and this form for the time from the end of the regular fiscal period until the date of death. Fill in the form for the short fiscal period as follows:
For more information about filing returns for deceased persons, see Guide T4011, Preparing Returns for Deceased Persons.
Part 5 applies only to businesses that started before 2023 and that sent this form with their income tax and benefit return last year.
If you cancel your previous election so that your fiscal period now ends on December 31, you have to report your business income on a calendar-year basis in later years. Once you have changed your fiscal period end to December 31, you cannot change it back.
For more information on amount H and I or if you are a partner in a partnership, see Part 8 – Detailed information.
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Amount A
If you have more than one fiscal period that does not end on December 31 for the same business, amount A is the total of the net income (loss) of these fiscal periods. For example, if you had a regular fiscal period ending on May 31, 2023, and then ceased to do business and retired on July 31, 2023, you would have a second fiscal period ending July 31, 2023.
You can find the net income (loss) amount you need to enter at amount A from your income and expenses statement for the fiscal period ending in 2023.
If you started your business in 2023, leave this field blank. Your net income (loss) is the amount found on line 9946 on the following forms:
If you are a partner in a partnership
A partner who has authority to act for a partnership can make the request to have a fiscal period that does not end on December 31. In this case, all partners in the partnership must fill in a copy of Form T1139 and send it with their income tax and benefit return (T1 tax return) to provide details of their net business income (loss) share.
Enter at amount A your share of the partnership's net business or professional income (loss) for the fiscal period ending in 2023. If you have deductible expenses from your share of the net partnership business income (loss), subtract these amounts before entering your share.
If you received a T5013 slip, Statement of Partnership Income, and you did not make adjustments to the amount in box 116, 120, or 122, enter the amount at amount A for the fiscal period ending in 2023. However, if you made adjustments to the amount in box 116, 120, or 122, enter the amount from line 9946 on the form that applies to your type of business income. See "Amount A" above for a list of the forms.
Examples to calculate the additional business income (amounts B and C)
Amount B - Your business started before 2023
Karim owns a roofing business with a fiscal period from April 1 to March 31. Karim's net income from the business for the fiscal period ending on March 31, 2023, is $45,000. He enters his net income of $45,000 at amount A of his Form T1139. The business does not have income from the disposition of property. Karim will complete the first formula in Part 1B as follows to calculate amount B since his fiscal period ends in 2023:
Amount C - Your business started in 2023
Karim started a roofing business with a fiscal period that started on April 1, 2023, and ends on March 31, 2024. Karim's estimated net income from the business for the fiscal period ending on March 31, 2024, is $45,000. The business does not have income from the disposition of property. Karim will complete the second formula in Part 1B as follows to calculate amount C since his first fiscal period ends in 2024 and he decided to declare part of his business income on his 2023 income tax and benefit return:
Amounts H and I
You can find the net income (loss) amount you need to enter at amount H from your income and expenses statement for the fiscal period ending before December 31, 2023, and at amount I from your income and expenses statement for the fiscal period ending on December 31, 2023. You need a separate income and expense statement for each fiscal period. Please see "Additional information for amount I" below. Your net income (loss) is the amount found on line 9946 on the following forms:
A partner who has authority to act for a partnership can make the request to return to a fiscal period that ends on December 31. In this case, all partners in the partnership must fill in a copy of Form T1139 and send it with their income tax and benefit return (T1 tax return) to provide details of their net business income (loss) share.
Amount H
Enter at amount H your share of the partnership's net business or professional income (loss) for the first fiscal period ending in 2023. If you have deductible expenses from your share of the net partnership business income (loss), subtract these amounts before entering your share.
If you received a T5013 slip, Statement of Partnership Income, and you did not make adjustments to the amount in box 116, 120, or 122, enter the amount at amount H for the first fiscal period ending in 2023. However, if you made adjustments to the amount in box 116, 120, or 122, enter the amount from line 9946 on the form that applies to your type of business income. See "Amounts H and I" above for a list of the forms.
Amount I
Enter at amount I your share of the partnership's net business or professional income (loss) of your fiscal period ending December 31, 2023. For example, if your first 2023 fiscal period ended on June 30, 2023, enter at amount I the net income (loss) for the period of July 1, 2023, to December 31, 2023. You must prepare a separate income and expense statement for this period.
If you have deductible expenses that relate to this income that you did not deduct at amount H, subtract them before entering your share of the net partnership income (loss) for this period.
If you received a T5013 slip and you did not make adjustments to the amount in box 116, 120, or 122, enter this amount at amount I for the fiscal period ending on December 31, 2023. However, if you made adjustments to the amount in box 116, 120, or 122, enter the amount from line 9946 on the form that applies to your type of business income. See "Amounts H and I" above for a list of the forms. Please see "Additional information for amount I" below.
Additional information for amount I
Generally, you calculate the income and expenses of your fiscal period ending on December 31, 2023, the same way as your first fiscal period ending in 2023. You have to consider the following items:
For more information on the items above, see guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.
For more information on CCA, see the Income Tax Folio S3-F4-C1, General Discussion of Capital Cost Allowance, and the guide that applies to your type of business income:
Example to fill in amounts H and I
Karim filed an election when he started his roofing business to have a fiscal period from April 1 to March 31. In 2023, he decides to cancel his election in order to have his fiscal period end on December 31 for 2023 and later years. This means that Karim will have two fiscal periods in 2023, the first fiscal period from April 1, 2022, to March 31, 2023, and a short fiscal period from April 1, 2023, to December 31, 2023. Karim's net income from the business is $45,000 for the first fiscal period and $30,000 for the short fiscal period. He enters $45,000 at amount H and $30,000 at amount I.