The Climate Action Incentive is a new, refundable tax credit starting in 2019; it can be applied for by eligible individuals on their 2018 personal tax return.
The Incentive is part of the federal government's climate-change plan, which, beginning in 2019, includes a carbon tax on fuels levied in provinces and territories that have not created a qualifying carbon-tax plan.
The new tax credit is available to residents of Manitoba, New Brunswick, Ontario, and Saskatchewan.
The amount of the payment is not contingent on income, but it does vary based on family size (that is, the number of dependants).
The government has confirmed the following amounts for 2019:
- For residents of Manitoba, the amount is $170 for a single adult or the first adult in a couple; $85 for the second adult in a couple or the first child of a single parent; and $42 for each child under the age of 18.
- For residents of New Brunswick, the amount is $128 for a single adult or the first adult in a couple; $64 for the second adult in a couple or first child of a single parent; and $32 for each child under the age of 18.
- For residents of Ontario, the amount is $154 for a single adult or the first adult in a couple; $77 for the second adult in a couple or the first child of a single parent; and $38 for each child under the age of 18.
- For residents of Saskatchewan, the amount is $305 for a single adult or the first adult in a couple; $152 for the second adult in a couple or the first child of a single parent; and $76 for each child under the age of 18.
- An additional supplementary amount is available for eligible individuals residing outside a census metropolitan area in Manitoba, New Brunswick, Ontario, or Saskatchewan.
The tax credit for 2019 can be claimed on line 449 of the 2018 federal income-tax return, and it is calculated on Schedule 14—Climate Action Incentive.
For more information, read our Tax Alert, “Climate Action Incentive Payments Announced” and speak with your BDO tax advisor.
This tax tip is a publication of BDO Canada LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of February 5, 2019.