The Government of Canada has officially confirmed that all final Carbon rebates for small businesses are tax-free. However, the last CCR payments are only non-taxable if you have filed your 2024 income tax return by July 15, 2025.
The distribution of the final CCR payments started in April. This year marks the official end of the quarterly CCR after the government ceased applying the federal fuel charge (the consumer-facing part of the carbon pricing system) as of April 1, 2025.
All CCR Payments Will Not Be Taxed, What Now?
Small businesses can choose not to include the Canada Carbon Rebate in their taxable income when they file their T2 Corporation Income Tax Return for the year it was received.
Check your filing deadlines with CRA.
What This Means for Your Business
- Direct financial support without increasing your tax owing.
- End of the quarterly CCR payments under the previous federal carbon pricing system for small businesses.
While the government has confirmed the non-taxability of all CCR payments, there is still a possibility of reassessment with interest if it does not receive Royal Assent. But it’s considered unlikely.
Still Haven’t Filed Your 2024 Tax Return?
Make sure your 2024 T2 corporation income tax return is filed by July 15, 2025, to claim your tax-free payment. Don’t miss out on this final opportunity for a tax-free rebate. Legend Fusions is here to offer end-to-end support for your corporate returns filing.
Jeffrey Ross
Jeffrey Ross is an experienced tax accountant focused on US-Canada cross-border taxation, with over three years in the industry, including a key role as client manager at a Canadian tax firm. He provides expertise in corporate and personal tax planning, specializing in non-resident tax, capital gains, CRA and IRS compliance, and retirement planning. Known for his personalized approach, Jeffrey is dedicated to guiding clients with clear, practical advice tailored to complex tax scenarios, aligned with the evolving tax laws.