A July 15th tax return filing deadline is looming for small and medium-sized businesses across Canada who could be eligible for the federal carbon tax rebate announced in the federal budget in April.
An estimated 600 thousand Canadian-controlled private corporations (CCPCs), including farms that are incorporated, could be eligible to receive more than $2.5 billion in retroactive carbon levy payments for the 2019-20 through 2023-2024 fuel charge years, according to the Canada Revenue Agency.
To be eligible for the rebate in a fuel charge year, an incorporated business must meet the following criteria:
– have employed one or more persons in a designated province in the calendar year in which the fuel charge year begins;
– have had 499 or fewer employees throughout Canada in that calendar year; and
– have filed their corporate income tax return for the tax year ending in 2023 no later than July 15, 2024.
The CRA, now led by former Agriculture Minister Marie-Claude Bibeau, says it is too early to say when the rebates will be paid out. The federal finance minister also has to specify the payment rates for each designated province for each fuel charge year.
The retroactive rebates will only apply in provinces and for the years where the federal carbon price backstop was in effect.
Businesses do not need to apply for the rebate, as it will automatically be calculated based on their tax return.
Finance Canada told RealAgriculture following the federal budget announcement in April that the new small business rebate will not affect farms’ eligibility for the existing fuel charge tax credit for farmers that was implemented following the 2021 federal budget.
Related: Incorporated farms included in new small business carbon tax rebate
