Capital cost allowance for your daycare

You cannot deduct in the same year all of the cost of a vehicle, furniture, or office equipment you use for your daycare. However, since these properties (which we call depreciable properties) will decrease in value over time, each year you can deduct part of their cost as capital cost allowance (CCA).

The capital cost of property is its purchase price plus any delivery charges, provincial or territorial sales tax, and the GST or HST.

There is a maximum amount of CCA that you can claim each year for each type or class of depreciable property. For example, the CCA rate for class 8 is 20% per year, and covers most furniture and equipment found in a daycare.

If you use depreciable property for business and personal use, you can claim CCA only on the part you use for business.

Some provinces and territories provide subsidies for the purchase of daycare equipment. If you receive a subsidy and you use part of it to buy depreciable property, do not include in your income the portion of the grant you used to purchase the property. Subtract this amount from the capital cost of the property.

You can use form T2125, Statement of Business or Professional Activities to calculate your CCA, or consult Chapter 4 of guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

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