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Quarterly Payments for the Climate Action Incentive (Revised)

As announced on December 3, 2021, the Climate Action Incentive (CAI) will be delivered quarterly, starting in July 2022. The CAI will no longer be paid as a refundable credit on the T1 return.

CAI Payments (CAIP)

CAIP will be delivered at the beginning of each quarter. To give the Canada Revenue Agency (CRA) sufficient time to develop the new system, payments will start in July 2022 with a “double-up” payment. This payment would return proceeds from the first two quarters of the 2022-23 fuel charge year (April 2022 to March 2023). The CRA will determine the actual payments for each quarter based on the information they have on file at the time.

Only one person can receive the credit for the family. The credit will be paid to the spouse or common-law partner whose tax return is assessed first. No matter which person receives the payments, the total amount will be the same.

For more information see Climate action incentive payment on the CRA website.

Schedule 14 in TaxCycle

In TaxCycle T1 2021, you will notice the following changes related to the CAI and Schedule 14 (S14):

  1. The Info worksheet still includes the questions affecting the taxpayer’s eligibility for the CAI, whether they were exempt from income tax or a recipient of the children’s special allowance. Answering Yes to either of these questions stops the calculation of the estimated CAI on the S14.
  2. The Optimizations worksheet no longer includes a section for claiming the CAI. 
  3. The CRA’s 2021 version of the S14 now only contains instructions and a question about whether the client resides outside a census metropolitan area. This detail appears at the top of the form in TaxCycle. Check the box only if the taxpayer meets these criteria.
  4. The rest of the form displays a calculation of the estimated quarterly payments for the 2022-23 fiscal year, including a breakdown by quarter. The amounts are currently those for 2021 and will be updated once the Minister of Finance announces the amounts for 2022. 
  5. The form also includes fields for indicating the Qualified dependants. Answer Yes next to a dependant’s name to include the amount for qualified dependants in the calculation. 
  6. If the dependant is in shared custody and you indicate this on the Dependant (Dep) worksheet (in the Count for CCB and GST credits? field), TaxCycle automatically answers Yes to the Shared custody field and adjusts the calculation accordingly.
  7. The table of estimated payments and the section for qualified dependants are on-screen only and will not print by default when you print the S14. To print a version that includes the estimate, select the Print as appears on screen check box in Printer and PDF Output Options
  8. The client letters also include the estimated total amount of CAIP, as well as a monthly breakdown of the anticipated payments.

Screen Capture: Schedule 14 for 2021