Canada Carbon Rebate for Small Businesses

Tax Topics
1

Hello everyone. May I ask for suggestions on what GIFI code to use for the new Canada Carbon Rebate for Small Businesses? And what line on Schedule 1 do you cancel this credit ?

2

Ditto. But, I’m guessing CRA won’t specify that until the bill gets royal assent.

3

some of my corporate clients have received it.

4

So have I. That doesn’t help. If you don’t want to wait for CRA to tell us exactly where to put it (on the S1), just pick a spot where it looks reasonable. If CRA doesn’t like it, they’ll let you know.

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5

I would just put it in miscellaneous income for now using GIFI 8230 and enter a deduction on S1 with the description “Carbon Rebate included in Other Revenue.”

6

I just learned that Chrystia Freeland tweeted on November 12 that the Canada Carbon Rebate for Small Businesses would be tax-free. I don’t recall seeing that in the budget documents, but this government often makes announcements without providing details or legislation, so it’s not surprising.

I suspect that the rebate will be recorded on the income statement but deducted on Schedule 1.

7

Enabling the CRA to Deliver the Canada Carbon Rebate for Small Businesses

The Canada Carbon Rebate for Small Businesses is a tax-free payment that will return $2.5 billion in proceeds from the price on pollution, for fuel charge years 2019-20 to 2023-24, to small- and medium-sized businesses through an automated process. To enable the Canada Revenue Agency to deliver these payments by the end of 2024, pursuant to subsection 127.421(2) of the Income Tax Act, the date specified by the Minister of Finance is October 1, 2024.

8

Is it just me or does anyone else think it is sort of stupid for this to be non-taxable? I heard the rational for non-taxable was that it was a “tax refund” and you can’t tax a tax refund. However the actual name is “Canada Carbon Rebate”, i.e. a recovery of some of the carbon tax that we have paid. So I know I haven’t, and doubt anyone else has, NOT CLAIMED the carbon tax that is paid as an expense. So if it was expensed and you get some of it back it should be income or a reduction of the expense. But what do I know…

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9

Thank you, Very helpful.

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10

You are confusing taxation and logic, and politics and logic…

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11

I got a notification from CRA that they would “send” me a cheque for $238. Sorry, Justin. I’m not that cheap.

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12

I will take whatever he wants to give me, even if I think it is foolishness on his part. Did he mention how he was going to send it?

13

I got $138 this morning myself applied against my outstanding tax balance…

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14

If you have direct deposit set up, it’ll be deposited into your bank account. If not, they’ll send it by cheque via Canada Post…who knows how long that will take.

15

Has anyone actually received notices on ‘My Business Account’?

16

I have. Got an email telling me I had urgent mail. Went to My Account, checked mail, and the notification letter was there. Once the postal workers come to their senses, I will get a cheque for $238. Unless Canada Post goes belly up in the meantime.

17

I couldn’t find the CCR notice through RepAClient but was able to find it on MyBusiness Account.

18

Yes - same as noted by @GuyWhoPlaysGolf

19

If, as they say, the Carbon Rebate is tax free…

Can it be distributed tax free to the shareholders, such as a ‘capital dividend’?

Thoughts?

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20

These… these are the questions to ask!!!