I would assume that was never the intent.
However, is there anything that prevents this ??
Looking at ITA 89(1), it is a no goâŚ
Thanks. Iâll go with GIFI 8230, then enter the same amount in S1 area 705 with the carbon rebate comment.
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Imagine being taxed at the pump, getting a portion of that money back, and then being taxed on that portion. Canada in a nutshell.
In my email today from CRA in case others havenât received this message:
" Reporting the Canada Carbon Rebate for Small Businesses on your T2 corporation income tax return
Under the current legislation, the Canada Carbon Rebate for Small Businesses is considered assistance received from a government and is subject to taxation. As such, it must be included in taxable income when filing your T2 corporation income tax return for the year in which the rebate was received.
The Government of Canada has proposed that the rebate be tax-free. However, a legislative amendment is required to implement this proposal.
If a legislative amendment is enacted, the CRA will have the authority to process amended T2 corporation income tax returns. Further guidance will be provided at that time.
Visit [Canada Carbon Rebate for Small Businesses ](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/business-tax-credits/canada-carbon-rebate-small-businesses.html)to stay informed."
The CFIB address this in a post on their website dated Feb. 10, 2025:
Canada Revenue Agency to tax the $2.5 billion small business carbon tax rebate despite decision by the Department of Finance .
So for those who havenât filed their corporate returns yet, seems we canât claim a reduction for this credit on Schedule 1 as discussed earlier on this thread. We must claim it as income now, and file for an adjustment much later after the govât tables a legislative amendment.
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You are correct @kozakworld
Apparently Chrystia Freelandâs âtweetsâ are not considered legislation.
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CFIB held a webinar today where this was discussed in depth. CFIB president Dan Kelly is extremely displeased with CRAâs determination - says itâs like taxing a tax refund. CFIB will continue to lobby for it to be non-taxable, but nothing will happen until parliament resumes. Further, Dan says that CFIB has been getting overwhelming responses from business owners to cancel the whole carbon tax system. Apparently Pollievere is considering that already, but Dan warns that whatever they replace it with might be just as bad.
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It appears that this is still subject to taxation.
How much you may get - Canada.ca
Reporting the Canada Carbon Rebate for Small Businesses on your T2 corporation income tax return
Under the current legislation, the Canada Carbon Rebate for Small Businesses is considered assistance received from a government and is subject to taxation. As such, it must be included in taxable income when filing your T2 corporation income tax return for the year in which the rebate was received.
The Government of Canada has proposed that the rebate be tax-free. However, a legislative amendment is required to implement this proposal.
If a legislative amendment is enacted, the CRA will have the authority to process amended T2 corporation income tax returns. Further guidance will be provided at that time.
Has anyone heard/read otherwise?
And if it remains taxable, the other question would be where to report it.
Any suggestions?
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I am using this guidance to report
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In case, you havenât seen it. Canada Carbon Tax update on taxability.
Steven
Sigh⌠I just filed them all as taxable and they had June 30th filing deadlines - would have been nice if they had announced this several weeks ago.
Draft legislation and explanatory notes:
https://fin.canada.ca/drleg-apl/2025/ita-lir-0625-eng.html
Steven