How to Apply for the BC Climate Action Tax Credit
By WelcomeAide Team
What Is the BC Climate Action Tax Credit?
The BC Climate Action Tax Credit (CATC) is a provincial benefit provided by the British Columbia government to help residents with the cost of the provincial carbon tax. British Columbia was one of the first jurisdictions in North America to implement a carbon tax, which applies to the purchase of fossil fuels. The CATC was introduced alongside the carbon tax to ensure that lower-income individuals and families are not disproportionately affected by the increased cost of fuel, heating, and other carbon-taxed goods.
The credit is administered by the Canada Revenue Agency (CRA) on behalf of the BC government. It is paid quarterly along with the federal GST/HST credit, typically in January, April, July, and October. The CATC is a tax-free benefit, meaning it does not count as taxable income.
Who Is Eligible?
To be eligible for the BC Climate Action Tax Credit, you must meet the following criteria:
- Be a resident of British Columbia. You must be a resident of BC on the last day of the month before the CRA makes the payment and at the beginning of the payment month.
- Be 19 years of age or older. If you are under 19, you may still qualify if you have a spouse or common-law partner, or if you are a parent who lives with your child.
- File a Canadian income tax return. You must file your T1 return for the applicable tax year, even if you have no income.
- Have a net family income below the phase-out threshold. The credit is reduced as your family income increases, and it is fully phased out at higher income levels.
Newcomers to Canada who became BC residents during the tax year are eligible for the CATC starting from the quarter after they file their tax return. It is essential that newcomers file their taxes, even if they arrived partway through the year and had little or no Canadian income. Our newcomer tax guide explains how to file your first Canadian tax return.
How Much Is the Credit?
The CATC amount varies each year and depends on your family income and the number of family members. For the current benefit year, the maximum annual amounts are approximately:
- $504.00 for an individual
- $504.00 for a spouse or common-law partner
- $126.00 for each child under 19
These amounts are divided into four quarterly payments. As your adjusted family net income increases beyond a certain threshold, the credit is reduced by a percentage of the excess income until it reaches zero. The exact threshold and reduction rate are set each year by the BC government and published on the BC Climate Action Tax Credit page.
For a family of four (two adults and two children) with a low family income, the total annual CATC could be over $1,200, paid as approximately $300 per quarter. This amount can make a meaningful difference for families managing tight budgets.
How to Receive the Credit
Step 1: File Your Income Tax Return
The most important step is filing your annual T1 income tax return with the CRA. You do not need to complete a separate application for the CATC. When you file your return and indicate that you are a BC resident, the CRA automatically assesses your eligibility based on your income and family information.
Make sure to file your return on time (by April 30 of each year for most individuals) to avoid delays in receiving your payments. If you file late, your payments may be delayed until the CRA processes your return. For help with filing, consider using a free tax clinic through the Community Volunteer Income Tax Program (CVITP).
Step 2: Complete the BC479 Form
When filing your tax return, ensure you complete the BC479 (British Columbia Credits) form. This is the provincial credits form that includes the CATC calculation. Most CRA-certified tax software will automatically include this form when you indicate that you are a BC resident.
Step 3: Set Up Direct Deposit
To receive your payments quickly and securely, set up direct deposit with the CRA. You can do this through your CRA My Account online, by calling the CRA, or by completing Form T1-DD at your financial institution. Without direct deposit, payments are mailed as cheques, which take longer to arrive.
Step 4: Update Your Information
If your marital status, number of children, or address changes during the year, update your information with the CRA as soon as possible. Changes can affect your CATC amount and ensure payments are sent to the correct address. You can update your information through CRA My Account or by calling the CRA at 1-800-387-1193.
Payment Schedule
The BC Climate Action Tax Credit is paid quarterly on the same dates as the federal GST/HST credit. The typical payment dates are:
- January 5
- April 5
- July 5
- October 5
If the 5th falls on a weekend or holiday, the payment is made on the last business day before the 5th. The July payment is based on your tax return filed for the previous year, so there may be an adjustment in July if your income or family situation changed.
Relationship to Other Benefits
The BC Climate Action Tax Credit is just one of several benefits available to BC residents. It is often combined with the following payments:
- GST/HST Credit - A federal tax-free quarterly payment that helps offset the GST or HST paid by lower-income Canadians. This is calculated automatically when you file your tax return.
- Canada Child Benefit (CCB) - A monthly tax-free payment for families with children under 18. If you have children, make sure you have applied for the CCB. Our guide to applying for the Canada Child Benefit explains the process.
- BC Family Benefit - A monthly tax-free payment for families with children, administered alongside the CCB.
All of these benefits are income-tested, meaning they decrease as your family income increases. Filing your tax return each year is the key action that determines your eligibility for all of them.
Special Situations
Newcomers to BC
If you arrived in Canada and became a BC resident during the tax year, you are eligible for the CATC starting from the quarter after you file your first Canadian tax return. Your income for the period before you arrived may need to be reported, depending on your residency status. Newcomers should file their taxes as soon as possible after arriving to begin receiving the CATC and other benefits. See our guide to applying for a SIN number for the first step in being able to file taxes.
Moving to or from BC
If you move to BC from another province, your CATC will be adjusted based on your province of residence on December 31 of the tax year. If you move out of BC, you will stop receiving the CATC after the quarter in which you leave. Make sure to update your address with the CRA promptly.
Couples and Shared Custody
For couples, the CATC is calculated based on the combined family net income. Only one partner receives the credit payment, typically the one whose tax return is assessed first or the one who applies for the GST/HST credit. For shared custody of children, the child amount may be split between parents.
The Carbon Tax and Why the Credit Exists
British Columbia's carbon tax is applied to the purchase and use of fossil fuels, including gasoline, diesel, natural gas, and propane. The tax is intended to discourage carbon emissions by making fossil fuels more expensive, thereby encouraging energy conservation and the adoption of cleaner energy sources.
The CATC exists to ensure that this environmental policy does not unfairly burden lower-income residents. While higher-income households can more easily absorb the increased costs, the CATC provides direct financial relief to those who need it most. This approach is sometimes called a "revenue-neutral" or "progressive" carbon tax design, where revenues from the tax are returned to residents through credits and tax reductions.
Common Questions
Do I need to apply separately for the CATC?
No. The CATC is calculated automatically when you file your income tax return and the BC479 form. There is no separate application.
What if I did not file my taxes?
You will not receive the CATC if you do not file your income tax return. File as soon as possible to begin receiving payments. You can file late returns for previous years to receive retroactive payments.
Is the CATC taxable?
No. The CATC is a tax-free benefit and does not need to be reported as income on your tax return.
Can I receive the CATC if I am on social assistance?
Yes. The CATC is available regardless of your income source. It is based on your net family income, so individuals on social assistance with low incomes will typically receive the full credit.
What if I owe money to the CRA?
If you have an outstanding debt with the CRA, your CATC payment may be applied to your debt. The CRA can offset benefit payments against amounts owing. If this happens, you will receive a notice explaining the offset.
Getting Help
If you have questions about the BC Climate Action Tax Credit, you can contact the CRA at 1-800-387-1193 or visit the CRA benefits page. For provincial information, visit the BC government's tax credits page. Newcomers can also use the WelcomeAide AI Navigator for guidance on benefits and tax filing in British Columbia.
Final Thoughts
The BC Climate Action Tax Credit is an important benefit for low- and moderate-income residents of British Columbia. It helps offset the cost of the provincial carbon tax and is delivered automatically when you file your income tax return. The key takeaway is simple: file your taxes every year, even if you have little or no income, to ensure you receive this and other valuable benefits. Set up direct deposit for faster payments, keep your personal information up to date with the CRA, and take advantage of free tax clinics if you need help filing.
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