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New! Quarterly Payments for the Climate Action Incentive

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

CAI payments 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.

Schedule 14 in TaxCycle

In TaxCycle, you will notice the following changes to 2021 T1 returns:

  1. Schedule 14 now only contains instructions and a question about whether the client resides outside a census metropolitan area. Check the box only if the taxpayer meets these criteria.
  2. Schedule 14 also includes an estimate of the quarterly payments for the 2022-23 fiscal year. The amounts are currently those for 2021 and will be updated once the Minister of Finance announces the amounts for 2022.
  3. The Optimizations worksheet no longer includes a section for claiming the CAI. 
  4. 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 Schedule 14.

Screen Capture: Schedule 14 for 2021