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What is the capital cost allowance (CCA) on accelerated investment incentive properties and zero-emission vehicles?

Certain depreciable property now has an accelerated capital cost allowance (CCA) deduction in the year of purchase. This rapid CCA applies to:

The Accelerated Investment Incentive is a limited-time program that lets Canadian businesses write off the cost of their depreciable property faster. To be eligible, the property must be:

  • Acquired after November 20, 2018
  • Available for use before 2028

Immediate full CCA write-off is available for:

  • Manufacturing and processing equipment and machinery (M&P)
  • Clean energy equipment (CEE)

For more information, visit the CRA’s page on accelerated investment incentive.

The CCA rate for most zero-emission vehicles (excluding taxis and vehicles used for lease or rent) is 30% or higher, with a maximum of 100% for certain vehicles. Taxis and vehicles used for lease or rent have a CCA rate of 40% or higher. 

To be eligible for these CCA classes, you must have: 

  • Acquired the vehicle after March 18, 2019
  • Not been paid assistance by the government under the federal purchase incentive

The vehicle must be:

  • New when you acquired it
  • Available for use before 2028
  • A plug-in hybrid with battery capacity of at least 7kWh or fully electric or hydrogen-powered
  • Not a trolley bus or rail vehicle

For more information, visit the CRA’s page on zero-emission vehicles.

To claim CCA on a zero-emission passenger vehicle in TurboTax, follow the applicable instructions below.

Note: These steps don’t apply to taxis or vehicles used for lease or rent.

Note: Before you begin, complete the Setting Up/Introduction part of your return until the Find button appears.

  1. Select Find (or the magnifying glass icon).
  2. Type employment and select Employment Expenses from the search results, then select Go.
  3. On the Employment Expenses screen, select Yes.
  4. On the Employment Expense Profile screen, select the checkbox for Motor Vehicle Expenses, then select Continue
  5. On the Employment Related Driving screen, enter all applicable vehicle details until reaching Enter the details of your vehicle if owned (not leased) and you want to claim Capital Cost Allowance (CCA). In this section:
    • At Class of vehicle, select 54: 30%
    • Enter the applicable date.
    • At Claim AII, select Yes. (Note: “AII” is the acronym for Accelerated Investment Incentive.)
    • Enter the UCC amount, vehicle cost, and sale proceeds, if applicable.
  6. Select Done With Vehicle.
  7. You’ll arrive at the Motor Vehicle Expenses Summary. If you’re claiming less than the maximum CCA, change the CCA For Year amount.
  8. Select Enter New Vehicle or Done With Vehicles, as applicable.

Note: Before you begin, complete the Setting Up/Introduction part of your return until the Find button appears.

  1. Select Find (or the magnifying glass icon). 
  2. Type self and select Self-Employment from the search results, then select Go.
  3. On the Your Self-employment Profile screen, select all applicable checkboxes, then select Continue.
  4. On the T2125 Business Summary screen, select Enter New Business if you haven’t already entered your business details.
  5. Proceed through your return, completing all applicable fields until reaching the Motor Vehicle Expenses Summary. On this screen:
    • Select Add a vehicle for business use for vehicles used by all partners.
    • Select Add a vehicle for [Name] for vehicles used only by you.
  6. On the Did you have any work-related vehicle expenses? screen, enter all applicable vehicle details until reaching Capital Cost Allowance Chart for Vehicle. In this section:
    • At Class #, select 54: 30%
    • Enter the UCC amount, if applicable.
    • Enter the applicable date.
    • At Claim AII, select Yes. (Note: “AII” is the acronym for Accelerated Investment Incentive.)
    • Enter the vehicle cost and sale proceeds, if applicable.
  7. Select Done With Auto.
  8. You’ll arrive at the Motor Vehicle Expenses Summary. If you’re claiming less than the maximum CCA, change the CCA For Year amount.
  9. Add another vehicle or select Done With Vehicles, as applicable.

Note: These steps don't apply to taxis or vehicles used for lease or rent.

Note: Before you begin, complete the Setting Up/Introduction part of your return until the Find button appears.

  1. Select Find (or the magnifying glass icon).
  2. Type employment and select Employment expenses from the search results, then select Go.
  3. On the Employment expenses screen, select Yes.
  4. On the Employment Expense Profile screen, select the checkbox for Motor Vehicle Expenses, then select Continue
  5. Proceed through your return, entering all applicable vehicle details until reaching the Capital Cost Allowance (CCA) screen. In this section:
    • At CCA Class, enter 54.
    • At Opening Balance, enter the UCC amount, if applicable. 
    • Enter amounts in both Cost of Additions columns. (Note: “AII” is the acronym for Accelerated Investment Incentive.)
    • Enter the vehicle sale proceeds, if applicable. 
  6. Select Done.
  7. Proceed through your return until reaching the Employment Expenses Summary. Select Done With Employment Expenses.

Note: Before you begin, complete the Setting Up/Introduction part of your return until the Find button appears.

  1. Select Find (or the magnifying glass icon). 
  2. Type self and select Self-employment from the search results, then select Go.
  3. On the Your self-employment profile screen, select all applicable checkboxes, then select Continue.
  4. Proceed through your return until the T2125 - Business Statement #1 screen. Enter your business details, then select Continue
  5. On the next T2125 - Business Statement #1 screen, enter all applicable vehicle details until reaching If you purchased motor vehicles during the year, enter the details here. In this section:
    • At Class #, enter 54.
    • Select the All checkbox. (Note: “AII” is the acronym for Accelerated Investment Incentive.)
    • Enter the vehicle cost.
  6. Complete the Calculation of Motor Vehicle Expenses section, then select Continue.
  7. Proceed until reaching the T2125 business summary. Select Done With Business.

Related information

How do I claim CCA on a new vehicle?

Why isn't the Capital Cost Allowance (CCA) being calculated on my forms?

Form T2125: Claim CCA on more than two vehicles being used as business expense

How do I claim two leased vehicles in a year on my T777 form?

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