Update: Immediate Expensing of Depreciable Property for Corporations (T2 Schedule 8)

The 2021 federal budget proposes to provide temporary immediate expensing to Canadian-Controlled Private Corporations (CCPCs) for eligible property acquired on or after April 19, 2021, and that becomes available for use before January 1, 2024, up to a maximum amount of $1.5 million per taxation year. This $1.5 million limit would be shared among associated members of a group of CCPCs. The limit would be prorated for taxation years that are shorter than 365 days.

Eligible property under this new measure would be capital property that is subject to the CCA rules, other than property included in CCA classes 1 to 6, 14.1, 17, 47, 49 and 51, which are generally long-lived assets.

See the section on Immediate Expensing in Annex 6 of the Federal Budget 2021 (page 614 in the PDF document). 

Revenu Québec has also announced its intention to harmonize with this new immediate expensing rule in an information bulletin indicating that this measure will be applicable on the same date as that retained for the application of the federal measure. See Information Bulletin 2021-5.

Immediate Expensing in TaxCycle T2

TaxCycle preparers have asked us if or when we will implement this new measure in TaxCycle T2.

In mid-September 2021, we received the following guidance from the CRA:

  • The CRA specifically instructed us not to add immediate expensing to TaxCycle T2.
  • The CRA clarified that tax preparers must not override the CCA claim to apply immediate expensing of CCA.