British Columbia put the first broad-based carbon tax in place in North America in 2008. Since then, the policy has continued to raise the carbon tax on greenhouse gas emissions generated from burning fuel, such as gasoline, diesel, and coal. This climate action incentive was created to encourage citizens to lower their environmental impact through energy-use reduction and increased efficiency.

Understanding that the tax could be a strain on residents, the BC government offers a carbon tax rebate to those with low- to moderate incomes, called the BC climate action tax credit (BCCATC). The carbon tax increased again on April 1, 2024. But the good news is—so have the tax credits that it funds and the income thresholds.

Here’s the latest on the BC carbon tax refund and why it now may be available to more residents.

Key Takeaways
  1. Recent changes to the carbon tax rebate’s income thresholds could increase payments and eligibility for more British Columbians.
  2. If you qualify for the BC climate action tax credit, you receive payments quarterly—along with the GST/HST credit—in July, October, January, and April.
  3. You need to file a tax return every year to get your BC climate action tax credit—even if you earn no income in a given tax year.

What is the BC climate action tax credit?

The BCCATC is a tax-free climate action incentive payment made to individuals and families with low- to middle incomes to help offset the carbon taxes they pay. It is part of the goods and services tax/harmonized sales tax (GST/HST) credit program administered by the Canada Revenue Agency (CRA). If the eligibility criteria is met, BC residents receive the benefit with their quarterly GST/HST credit payments.

Now, how is this credit different from the Canada Carbon Rebate (CCR)—formerly known as the Climate action incentive payment (CAIP)—you ask? The CCR is the federal version of BC’s carbon tax rebate—tax-free money paid out by the feds to residents of certain provinces to counter the cost of federal pollution pricing.

There may be some confusion as to whether BC gets a carbon tax credit. It does, but BC operates a little differently than the rest of the country, charging its own carbon tax and sending out its own quarterly carbon tax rebate to its residents. So if you live in BC, you will not be eligible for the federal CCR—but you will be eligible for the BC climate tax credit.

What are the changes to BC’s climate tax rebate?

In 2023, BC started increasing the income thresholds so that more British Columbians would be eligible for the benefit. The plan is to continue this trend and increase the BC climate action tax credit amounts and the threshold amounts.

As of July 1, 2024, more than 100% of the revenue from the carbon tax increase will be put toward the climate action tax credits, helping many people get money back in their pockets. To make this happen, for the 2023 tax year income threshold amounts increased to:

  • $41,071 for individuals (previously $39,115)
  • $57,288 for families (previously $50,170)

This means if your adjusted family net income (AFNI) was below the income threshold in 2023, you’ll receive the maximum amount based on the number of adults and children in the household.

If your income was higher than the income thresholds above, the BC climate action tax credit is reduced by 2% of the amount of your income that’s above the threshold—until the credit becomes zero (which means you are not eligible).

For families, when the credit becomes zero will depend on a few variables, including your family makeup.

What are the BC climate action tax credit payment dates?

Payments are issued quarterly—combined with the quarterly payment of the federal GST/HST credit—and usually are made on the 5th day of the month.

For the 2024–2025 payment period, there’s been a boost to the maximum annual amounts. So the July 2024, October 2024, January 2025, and April 2025 payments will be:

  • For individuals receiving $447 over the course of a year, they will now get $504 a year.
  • For your spouse or common-law partner (or for the first child in a single-parent family) previously receiving $223.50, they will now get $252.00.
  • For your children (except the first child in a single-parent family) receiving $111.50, they will now get $126.00.

For example, for a family of 4—individual, spouse/common-law partner, 2 children—receiving $893.50 over the course of a year, payments will increase to $1,008 a year ($504 + $252 + $126 + $126 = $1,008).

(If payments end up being less than $40 per quarter, you will get the entire amount in your July payment.)

Am I eligible for the BC climate action tax credit?

To be eligible for the climate action tax credit you need to be a BC resident and file your and your spouse’s or common-law partner’s (if applicable) tax returns annually.

You’re eligible to receive the credit if you’re a resident of BC and you:

  • Are 19 years of age or older
  • Have a spouse or common-law partner
  • Are a parent who lives with your child

When you file your tax return and the CRA determines your eligibility for the GST/HST credit, they will include the BC provincial carbon tax rebate in the calculation.

In the case of couples, only one person can get the rebate. The spouse or common-law partner whose tax return is assessed by the CRA first will be the one who receives the credit.

Also, in order for an individual or a family to receive the full credit, their AFNI needs to be below the limit defined for the tax year. This limit changes annually, so check the BC government website for updates. The benefits calculator can also be helpful in determining your carbon tax refund.

Does everyone in BC get the carbon tax rebate?

More than 2 million individuals and families will see an increase in their climate action incentive pay, according to the BC government website; but not everyone gets the credit.

For instance, a family—either two-parent or single-parent—must have an AFNI under the limit. If you earn more income than the limit, your carbon tax credit will be reduced by a percentage of the overage. Those with an income that’s too high will be priced out of the benefit.

Payments are issued quarterly. So in order to receive them, you need to be a resident of BC on both the first day of that quarter and the first day of the previous quarter. For example, to get the October payment, you need to be a resident of BC on both October 1 and July 1. So if you’re a resident for only part of the year, you’ll need to pay attention to these dates and your whereabouts.

Despite some rules to digest, what’s good is that the BC government wants to make the credit much more universal. Approximately 65% of British Columbians currently receive a rebate through the tax credit. The goal is for the credit to increase annually so that 80% of individuals and families in BC will receive a refund by 2030.

How can I apply for the BC carbon tax credit?

When you file your T1 Income Tax and Benefit Return, the CRA will determine whether you are eligible and calculate your credit amount for you. You don’t need to go through an application process to receive the BC climate action tax credit.

You just need to file a tax return every year to keep receiving the credit—even if you earn no income in that tax year. The credit does not automatically renew.

Remember, climate action tax credit payments are non-taxable, so you don’t have to include these payments as income when you file your T1.

And make sure that your direct deposit information or mailing address is up to date, so that you can receive your payments promptly.

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