Capital Cost Allowance on Your T2125
CCA lets you write off equipment, vehicles, and technology over time. Know which class your assets belong to and how to maximize your first-year deduction.
Capital cost allowance (CCA) is the CRA's version of depreciation: instead of deducting the full price of a capital asset — a laptop, a camera, a work truck — in the year you buy it, you deduct a percentage of its cost each year on Line 9936 of your T2125. Anything with a useful life beyond one year is a capital asset; deducting the full cost right away is reserved for current expenses like office supplies and repairs.
Every asset belongs to a CCA class with its own declining-balance rate — computers sit in Class 50 at 55%, furniture and most equipment in Class 8 at 20%, vehicles in Class 10 or 10.1 at 30%. Each year you apply the class rate to your undepreciated capital cost (UCC): the portion of the asset's cost you haven't deducted yet. Claiming CCA is optional — in a low-income year you can claim less than the maximum (or nothing at all) and keep the UCC available for future years when the deduction is worth more against a higher tax bracket.
Two first-year rules matter. The half-year rule normally limits you to 50% of the class rate in the year you acquire an asset. But the Accelerated Investment Incentive (AII) replaces it for eligible property. The original AII covered property acquired after November 20, 2018: three times the half-year amount (1.5× the full class rate) if it became available for use before 2024, reduced to two times (the full rate) for 2024–2027. The reinstated AII — announced in the 2024 Fall Economic Statement and enacted by Bill C-15 (Royal Assent March 26, 2026) — restores the full 1.5× enhancement for property acquired after 2024 and available for use before 2030, phasing out from 2030 to 2033. Computers in Class 50 acquired after April 15, 2024 and available for use before 2027 may instead qualify for a 100% first-year deduction (immediate expensing for productivity-enhancing assets). Check which regime matches your purchase date before filing.
Disposing of an asset has tax consequences too: sell it for more than its remaining UCC and the difference comes back into your income as recapture; sell the last asset in a class for less than the UCC and you can usually claim the shortfall as a terminal loss (Class 10.1 passenger vehicles excepted). And think twice before claiming CCA on a home office — it can expose your principal residence to capital gains tax, as covered in our business-use-of-home guide.
What You Can (and Can't) Deduct
Know exactly what belongs on Line 9936 — and what the CRA says doesn't qualify.
What Qualifies
- Computers and laptops (Class 50, 55%)
- Software (Class 12, 100%)
- Office furniture (Class 8, 20%)
- Camera and video equipment (Class 8, 20%)
- Tools under $500 (Class 12, 100%)
- Tools $500+ (Class 8, 20%)
- Work vans and pick-ups that are not passenger vehicles, and passenger vehicles up to $38,000 (Class 10, 30%)
- Passenger vehicles over $38,000 (Class 10.1, 30%)
- Zero-emission vehicles (Class 54, 30% + enhanced first-year)
- Smartphones and tablets (Class 50, 55%)
- Leasehold improvements (Class 13, variable)
Does NOT Qualify
- Inventory or supplies (current expenses)
- Land (not depreciable)
- Personal assets
- Items already fully expensed as current expenses
Rules & Limits
Special CRA rules and percentage limits that apply to capital cost allowance (cca).
Special Rules
Half-Year Rule
Heads upIn the year you acquire an asset, you can generally only claim half the normal CCA rate. This applies to most CCA classes and reduces your first-year deduction.
Regulation 1100(2)AIIP 1.5x First-Year Enhancement
AdvantageThe Accelerated Investment Incentive (AII) replaces the half-year rule with a larger first-year claim. Original AII (property acquired after November 20, 2018): 1.5x the full rate if available for use before 2024, the full rate for 2024–2027. Reinstated AII (Bill C-15, Royal Assent March 26, 2026): 1.5x the full rate again for property acquired after 2024 and available for use before 2030, phasing out 2030–2033.
Section 1100(0.1)Class 10.1 Vehicles — Special Rules
Heads upPassenger vehicles costing over $38,000 (2025 purchases) each go into their own separate Class 10.1 — work vans and pick-ups that meet the CRA's goods-transport tests stay in Class 10 with no cap. You cannot claim a terminal loss when disposing of a Class 10.1 vehicle, and each vehicle is treated as its own class.
CCA on Home Office — Capital Gains Risk
Heads upClaiming CCA on your principal residence can trigger a capital gains liability when you sell. Most tax advisors recommend NOT claiming CCA on your home office to avoid this issue.
Percentage Limits
| Rule | Limit |
|---|---|
| Class 50 — computers, laptops, smartphones, tablets | 55% |
| Class 8 — furniture, cameras, equipment, tools $500+ | 20% |
| Class 10 — motor vehicles and passenger vehicles up to $38,000 | 30% |
| Class 12 — software, small tools under $500 | 100% |
| Class 54 — zero-emission vehicles | 30% |
| Class 13 — leasehold improvements | Straight-line |
Real-World Examples
See how different professionals use Line 9936 deductions in practice.
MacBook Pro Purchase
Purchased a MacBook Pro for software development and client work.
$2,899
~$2,392 first-year if bought in 2026 (Class 50: 55% × 1.5 under the reinstated AII) — possibly the full $2,899 under Class 50 immediate expensing; confirm with your accountant
Camera Body + Lenses
Invested in a professional camera body and multiple lenses for client photography work.
$5,400
~$1,620 first-year if bought in 2026 (Class 8: 20% × 1.5 under the reinstated AII)
Work Truck (Over $38,000)
Purchased a regular-cab pick-up (driver + 2 seats) used more than 50% to haul materials and tools to job sites.
$45,000 (not a passenger vehicle, so no $38,000 cap)
Class 10 at 30% on the full $45,000 (first year 1.5× under the reinstated AII if bought in 2026); a crew-cab used under 90% for hauling would be a passenger vehicle → Class 10.1, capped at $38,000
Common Mistakes to Avoid
These errors on Line 9936 can trigger a CRA review — here's how to get it right.
Not claiming CCA on computers and equipment
Many self-employed individuals forget to claim CCA on computers, cameras, and other equipment. These assets have dedicated CCA classes with generous depreciation rates (e.g., Class 50 at 55% for computers).
Claiming CCA on principal residence (creates capital gains liability on sale)
While you CAN claim CCA on the business-use portion of your home, doing so may create a capital gains liability when you sell. Most tax advisors recommend claiming other home office expenses but NOT CCA on the home itself.
Putting tools in wrong class (under $500 = Class 12, over $500 = Class 8)
Tools costing under $500 go in Class 12 (100% write-off). Tools costing $500 or more go in Class 8 (20% declining balance). Furniture is always Class 8 regardless of cost.
Commonly Confused Categories
These categories are often mixed up with Capital Cost Allowance (CCA). Here's the difference.
Office Expenses
Small items (pens, paper, toner) are current expenses on Line 8810. Larger items with a useful life beyond one year (desks, computers, printers) are capital assets claimed via CCA on Line 9936.
Repairs & Maintenance
Repairs that restore an asset to its original condition are current expenses on Line 8960. Improvements that extend the asset's life or enhance its value are capital expenditures claimed via CCA.
Sample Receipt Walkthrough
See how ScanForTax processes a typical cca expense.
Apple Store
2025-06-20
Ontario
How ScanForTax categorizes this
ScanForTax identifies this Apple Store purchase as a capital asset and flags it for CCA treatment. The MacBook goes into Class 50 (55% rate). The $415.74 HST is fully recoverable via ITC. AppleCare+ could be expensed separately as a current expense.
Tax Calculation Breakdown
See the exact tax math for a typical cca purchase.
$3,000 MacBook Pro (Class 50 — 55%)
Ontario
The $390 HST is recoverable via ITCs if you are GST/HST-registered. The $3,000 base cost is NOT expensed immediately — it enters Class 50 at a 55% rate. Under the Accelerated Investment Incentive (reinstated for property acquired after 2024 and available for use before 2030), the first-year claim is 1.5× the full rate: up to $2,475 of CCA in year one, with the remaining UCC carrying forward. Class 50 property acquired after April 15, 2024 and available for use before 2027 may qualify for a 100% first-year deduction instead — confirm with your accountant.
Frequently Asked Questions
What is the half-year rule?
Should I claim CCA on my home office?
Which CCA class does my computer go in?
What is capital cost allowance?
What is the difference between CCA and a current expense?
What happens when I sell an asset I claimed CCA on?
Related Professions
Profession-specific guides that frequently use CCA deductions.
Tax Guides by Province
See how tax recovery works for cca expenses in each province.
Related Expense Categories
Tax deadline is April 30th.
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