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What is the Climate Action Incentive?

SOLVEDby TurboTax52Updated March 28, 2022

The Climate Action Incentive (CAI) payment was introduced in 2018 by the Government of Canada to offset the impact of carbon pollution tax increases on Canadians.

For 2020 and later tax years, the CAI is available to residents of Ontario, Manitoba, Saskatchewan, and (since 2019) Alberta.

Residents of other provinces pay a provincial carbon tax, or their province is part of the federal carbon pollution pricing system. These Canadians aren't eligible to receive the payment. New Brunswick residents are also no longer entitled to the CAI.

Note: For tax year 2021, the delivery of CAI payments has changed from a refundable credit claimed each year to quarterly payments made through the benefit system.

As of 2022, eligibility for each quarterly CAI payment will be based on the individual’s status in April, July, October, and January (of the following year).

You may be eligible if, for the specified month, you’re:

  • A resident of Ontario, Manitoba, Saskatchewan, or Alberta
  • At least 19 years old, or
  • Any time before the month, you were:
    • Married or in a common-law relationship, or
    • Living with your child

You may not be eligible if, at the start the specified month, you were: 

  • A nonresident of Canada, unless you were:
    • A Canadian resident any time before the month, and
    • Living with your spouse/common-law partner who was a Canadian resident throughout the tax year
  • In prison for at least 90 days
  • A foreign diplomat
  • Receiving a children’s special allowance

The CAI payment consists of a basic amount that varies by province, plus a 10% supplement for residents of small and rural communities. To receive the supplement, you must have lived in an eligible area at the end of the year. 

CAI payment amounts for 2022–23 can be found on the CRA's Climate Action Incentive payment amounts webpage.

Beginning in July 2022, the CAI will be paid each quarter to eligible taxpayers via the benefits payment system, similar to payment of the GST/HST credit.

You won't claim the 2022 CAI on your 2021 tax return. However, you'll still need to file a tax return to receive these payments. You also need to indicate on your return if you're eligible for the 10% rural supplement.

For 2020 and prior tax years, the CAI is claimed on T1 line 45110. As only one payment is allowed per household, decide which family member will apply, and the payment will be added directly to their return. Learn how to make your claim in TurboTax Online or TurboTax CD/Download.

Related information

How do I claim the Climate Action Incentive in TurboTax Online?

How do I claim the Climate Action Incentive in TurboTax CD/Download?

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