Businesses – Tax information newsletter, Edition 2026- 02 – May 21, 2026
Update on the non-taxability of the Canada Carbon Rebate for Small Businesses
On March 26, 2026, the Government of Canada passed legislation that makes the Canada Carbon Rebate for Small Businesses non-taxable for all fuel charge years. The CRA is now reviewing the T2 Corporation Income Tax Returns for businesses that may have included the rebate in their taxable income for the year it was received.
Here’s what this means for your business and what steps you may need to take.
- If your corporation filed before the announcement on June 30, 2025, in which the government committed to making the rebate tax-free, and:
- There is clear indication the rebate amount was reported at line 295 of the Schedule 1, we will complete an adjustment to remove the amount from the calculation of your taxable income. No action will be required on your part.
- There is no clear indication the rebate was included in taxable income, we will be requesting additional information in order to determine if an adjustment to your T2 return is needed.
- If your corporation filed after June 30, 2025, and included the rebate in your taxable income:
- You will need to submit an adjustment request: Requesting a reassessment of your T2 return.
Refer to the flowchart on our website for a visual depiction of this process.
Businesses: Add or update your email address now to avoid missing important CRA changes
The CRA now sends most business correspondence online.
To make sure you don’t miss important updates:
This allows the CRA to notify you when new mail is available or when changes are made to your account. Without a current email address you could miss key information.
Learn more here : Businesses : Add or update your email address now to avoid missing important CRA messages
2026 Tax deadlines for Canadian businesses and self-employed individuals
Check out this new web page that highlights the 2026 tax deadlines for Canadian businesses and self-employed individuals. It’s designed to help you stay organized and manage your tax obligations with ease.
The Liaison Officer service is here to help!
Did you know the Canada Revenue Agency has a free service designed to help small business owners and self-employed individuals understand their tax obligations? It’s called the Liaison Officer service and it offers personalized support to those who are self-employed or run their own business.
Our Liaison Officers can help you understand your tax obligations, learn about business deductions and how to report rental income.
The results speak for themselves. Over 98% of taxpayers who participated in an anonymous post-visit survey said our Liaison Officers were able to answer all of their tax-related questions.
Don’t delay, book a personalized visit or learn more about the Liaison Officer service by visiting canada.ca/cra-liaison-officer.
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