What You Need to Know About Climate Action Incentive Payment (CAIP)

April 5, 2023

It pays to file your taxes in Canada!

We have previously discussed certain tax benefits and credits available to you when you file your tax returns;

Today, we will be talking about another unique benefit sponsored by the Government of Canada – the Climate Action Incentive Payment (CAIP)!  This is a quarterly tax-free benefit amount paid to help individuals and families offset the cost of the federal pollution pricing.

Although, the CAIP is specifically available to residents of Alberta, Saskatchewan, Manitoba and Ontario, the Government of other provinces also provide very identical benefits to tax payers resident in their geographical location. One example is the BC Climate Action Tax Credit for residents of British Columbia.

You don’t need to apply separately to receive the CAIP payment. The Canada Revenue Agency (CRA) will determine your eligibility when you file your income tax and benefit return and will send you payments if you’re entitled to them.

If you have a spouse or common-law partner, only one of you can get the credit for the family. The credit will be paid to the spouse or common-law partner whose tax return is filed first. No matter which one of you receives the credit, the amount will be the same.

In order to continue receiving your payments for the CAIP, you and your spouse or common-law partner, if applicable, must continue to file an income tax and benefit return every year.

Who is eligible for the CAIP?

You are eligible for this credit if you are a resident of Canada for income tax purposes in the month before, and at the beginning of the month in which the CRA makes a payment. Other requirements include;

  • You must be a resident of an eligible CAIP province on the first day of the payment month.
  • Must be at least 19 years old. If you are under 19 years old, you must meet at least one of the following conditions;
    • Have (or previously had) a spouse or common-law partner.
    • Are (or previously were) a parent and live (or previously lived) with your child.

Your child can claim the CAIP if he or she is eligible, and meets all the following conditions at the beginning of the payment month;

  • Your child is under 19 years of age.
  • He or she lives with you.
  • You are primarily responsible for the care and upbringing of your child.
  • Your child is registered for the Canada child benefit.

If you are eligible for the Canada Child benefit, a credit for each eligible child will be included in the calculation of the CAIP.

Newcomers are not left behind!

As an immigrant, you can register and earn the CAIP by filling out and submitting Form RC66 (if you have children). If you do not have children, then complete form RC 151.

You can see more information about how much you can expect to receive under this CAIP incentive here.

What Next?

Now that you have learned about the CAIP, you have an opportunity to claim this incentive payment, up to the sum of $1,098. But this can only be possible when you file your tax returns as an individual or as a family.

The good news is, at EMCA we can help you get your taxes filed promptly so you can enjoy this benefit alongside other tax credits.

Reach out to us today to begin!