Canada Revenue Agency
www.cra.gc.ca
Common menu bar links
Capital cost allowance (CCA) for your daycare
You cannot deduct the cost of a vehicle, furniture, or office equipment if you use them for business purposes. However, since these properties (which we call depreciable properties) will decrease in value over time, you can deduct part of their cost as capital cost allowance (CCA).
There is a maximum amount of CCA that you can claim for each type or class of depreciable property. For example, the CCA rate for class 8, which covers most furniture and equipment found in a daycare, is 20%.
In most cases, the capital cost of property is the amount you pay for it, including delivery charges, provincial or territorial sales tax, and GST or HST. If you use property, such as a vehicle, for both business and personal use, you can claim CCA on the business part only.
Some provinces and territories give grants to buy daycare equipment. If you receive such a grant and buy depreciable property, do not include in your income the part of the grant that you used to buy the depreciable equipment. Instead, reduce the capital cost of the property by the applicable part of the grant.
To claim CCA on a motor vehicle that you use for your daycare, you need the original invoice for the vehicle. If there is a change in use, record the fair market value (FMV) of your vehicle when you first begin to use it for buiness purposes. If you change the use of the vehicle from business back to personal in the future, you will have to determine the FMV of the vehicle at that time. For more information on FMV, see Guide T4002, Business and Professional Income.
You can use Form T2125, Statement of Business or Professional Activities to calculate your CCA. For more information, see Chapter 4 of Guide T4002, Business and Professional Income. For information on how to calculate your CCA, see Claiming capital cost allowance (CCA) .
Report your CCA expenses on line 9936 of Form T2125.
Forms and publications
- Guide T4002, Business and Professional Income
- Booklet P134, Using Your Home for Daycare
- Form T2125, Statement of Business or Professional Activities
