Claim the Climate Action Incentive – Carbon Tax Rebate

The Climate Action Incentive (CAI) tax credit is intended to offset the Federal Carbon Tax (called a “Fuel Charge”) which began April 2019.

Net Impact of the Climate Action Revenue Incentive Program & Carbon Tax Rebate

After paying the fuel charge, and receiving the Climate Action Incentive credit the government estimates that the average Canadian household of a family of 4, will actually be better off.

The federal government estimates that the average household will receive an incentive of:

  • $598 in Saskatchewan
  • $336 in Manitoba
  • $300 in Ontario
  • $256 in New Brunswick
  • $444 in Alberta

Residents in more rural areas will receive 10% more than residents who live in cities.  This was explained by the government as being due to the fact that rural Canadians use more energy and that do not have as many public transportation options as city-dwellers have available to reduce their fuel consumption.

What the Climate Action Revenue Incentive Program is:

As part of the Government of Canada’s Climate Change Plan, residents of New Brunswick, Ontario, Manitoba, Saskatchewan and later added Alberta will receive a tax credit called the Climate Action Incentive (CAI) when they file their income tax returns.

The “fuel charge” will be added to the cost of gasoline, so gas prices will increase, and it will be added to the cost of residential heating, so home heating bills have also increased.  The CAI is intended to offset these tax increases and lessen the impact to Canadians.

The federal government has determined that rather than assessing the Federal Carbon Tax in the form of an additional tax increase, by adding it to the cost of your gas when you fill up at the pumps and adding it to home heating bills, it essentially hides the impact, and the credit offsets that increase.

Eligibility

In order to receive the Climate Action Incentive tax credit, you have to file your personal income tax return.

Non-residents of Canada or Canadians who were incarcerated at any point in the year are not entitled to the credit.

How Much is the Climate Action Incentive?

The amount you receive is based on the size of your family, so you just have to decide which family member will apply for the credit (one credit per household allowed), and the credit will be added directly to your tax return.

How to Claim the CAI Tax Credit?:

If you are using any TurboTax products, once you input your province at the beginning of the tax return, the credit is immediately added then as you process your tax return, you will find more information in the “Provincial” section of your tax return.  This amount will be reflective on the Detailed Tax Summary page line 45110 of your T1.

Provincial breakdown based on household size which increases each fiscal year:

New Brunswick

  • $128 for a single adult or the first adult in a couple
  • $64 for the second adult in a couple, or, in the case of single parents, for their first child
  • $32 for each child in the family beginning with the second child for single parents
  • A family of four will receive $256.

Ontario

  • $224 for a single adult or the first adult in a couple
  • $112 for the second adult in a couple, or, in the case of single parents, for their first child
  • $56 for each child in the family starting with the second child for single parents
  • A family of four will receive $448.

Manitoba

  • $243 for a single adult or the first adult in a couple
  • $121 for the second adult in a couple, or, in the case of single parents, for their first child
  • $61 for each child in the family starting with the second child for single parents
  • A family of four will receive $486.

Saskatchewan

  • $405 for a single adult or the first adult in a couple
  • $202 for the second adult in a couple, or, in the case of single parents, for their first child
  • $101 for each child in the family starting with the second child for single parents
  • A family of four will receive $809.

Alberta

  • $444 for a single adult or the first adult in a couple.
  • $222 for the second adult in a couple, or if single-parent – for their first child
  • $111 for each child in the family starting with the second child for single parents.
  • A family of four will receive $888.

If you live in any other part of the country, you will not receive this tax credit because residents of all other provinces are not being charged the fuel charge thus are not eligible for the CAI offset credit.

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