The Federal Government has officially confirmed that all payments made under the Canada Carbon Rebate for Small Businesses (CCRB) will be provided tax-free.
What’s New?
The Federal Government has confirmed that Canada Carbon Rebate for Small Businesses (CCRB) payments will be tax-free across all fuel charge years from 2019–20 through 2024–25. Businesses will not be required to include these payments in taxable income. Additionally, the Government has introduced an extended filing window.
Those who filed their 2023 corporate income tax return between July 16 and December 31, 2024, will still be eligible to receive retroactive payments for the 2019–20 to 2023–24 fuel charge. Businesses that filed their 2024 return by July 15, 2025, will qualify for the final CCRB payment covering the 2024–25 year.
Due to the removal of the fuel charge, the Government also confirmed it will not proceed with proposed expansions. These cancelled changes include the extension of eligibility to cooperative corporations and credit unions, the introduction of a minimum payment threshold, and the implementation of a phaseout mechanism for larger businesses. These changes will be enabled once legislation receives Royal Assent in the fall.
What Should Businesses Do Now?
To secure all available CCRB payments, small businesses should have filed their 2024 corporate tax return by July 15, 2025, ensuring eligibility for the final CCRB installment. Businesses should also consult their tax advisors to confirm eligibility.
If you have any questions regarding how these changes may impact your business or any other accounting, tax planning, or business advisory items, please contact your Bateman MacKay Business Advisor. Topical accounting, tax, and business advisory articles pertinent to business owners can be accessed by subscribing to our blog and following us on LinkedIn.
FAQ: Canada Carbon Rebate for Small Businesses
Is the rebate taxable?
No. CCRB payments are tax-free for all fuel charge years (2019–2025).
What years are covered?
The rebate applies to the 2019-20 to 2024-25 fuel charge years.
What was the deadline to file for retroactive payments?
The 2023 tax return must have been filed by December 31, 2024, to be eligible for prior-year rebates.
What is the deadline to receive the final payment?
The 2024 tax return must have been filed by July 15, 2025, to qualify for the 2024–25 rebate.
