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lgroleau
January 1, 2025
Solved

non-taxable carbon tax credit

  • January 1, 2025
  • 3 replies
  • 0 views

I am incorporated and do my own books. How do I enter the carbon tax credit that I received into my bank account. It is not taxable so it does not go into "Other Income". If I do a Journal Entry, I put the amount into my bank my what is the other half? Please help.

Best answer by lgroleau

Exactly my dilemma as well.  I put it in as income and labelled it Canada Carbon Rebate so it is separate from my sales.  Hopefully my accountant that does my corporate taxes won't put it on my taxes but you have to enter it as income in your books so you will balance.


Hello Andrea,

This is why I put the Carbon Tax Credit as a deposit from me personally. It is not income. At least putting it as (PUC) it will not be considered as income and may flag the accountant to look into it more closely or the chance of being overlooked and considered as income anyways.

3 replies

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Trish_T
January 2, 2025

Hi lgroleau,


Welcome to Community!   It's essential that you record the carbon tax credit accurately, in QuickBooks Online.  For this reason, I recommend speaking with an accounting professional. They'll be happy to provide their expertise and best course of action, to ensure a positive outcome on your books. If you don't have an accountant, we can help you locate a ProAdvisor in your local area. 

 

If you have any other questions, feel free to reach back out. We would be glad to help!

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lgroleauAuthor
January 2, 2025

Hi Trish,

Thank you, but it does not answer the question. Is the ProAdvisor a paid function of QB? In other words I look up a ProAdvisor, they provide me the answer to my question and I pay them for their support?

Sincerely,

Louise

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SW7
January 12, 2025

Hi Igroleau,

I just received by carbon tax rebate also.  How did you end up recording the transaction?

Thanks

Steve

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Amy2025
January 20, 2025

This is what I did:

 

I had this situation back in December.

My accounting suggested I enter it like a deposit.

So under the "Received from" we put the CRA "From Account" we created a Miscellaneous Income" 

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lgroleauAuthor
January 20, 2025

That's the kicker. If you put it in Miscellaneous Income, you will pay taxes on it. This is non-taxable income.

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Andrea2204
February 1, 2025

Exactly my dilemma as well.  I put it in as income and labelled it Canada Carbon Rebate so it is separate from my sales.  Hopefully my accountant that does my corporate taxes won't put it on my taxes but you have to enter it as income in your books so you will balance.

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DJF-CPA
February 4, 2025

I'm a CPA and it's frustrating to see the canned responses from Quickbooks support such as contact a professional accountant (which you may have to pay for) or read the attached article.

 

The carbon rebate is income, just not taxable income.  Your bank and other users will want to see it as income.  It is similar to non-deductible expenses such as golf, CRA penalties or 50% of meals.  Your tax preparer will remove the income to arrive at taxable income when your tax return is prepared, but nonetheless it is income on your financial statements

 

The solution is to open a revenue account called "Non Taxable Revenue" and post it there via a bank deposit. Because most companies only have a few revenue accounts, its unlikely to get missed at tax time.  In addtion, most tax preparers know about it and should have it on their checklists to remove when preparing taxes

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