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 give grants to buy daycare equipment. If you receive a grant for this purpose, and you buy depreciable property with some of the grant, do not include in your income the part of the grant you used to buy the depreciable property. Instead, reduce the capital cost of the depreciable property by the part of the grant used to buy the property.

You can use Form T2125, Statement of Business or Professional Activities, to calculate your CCA, or consult Chapter 4 of Guide T4002, Business and Professional Income.

Forms and publications

• Guide T4002, Business and Professional Income
• Booklet P134, Using your Home for Daycare
• Form T2125, Statement of Business or Professional Activities

Related Topics

• Claiming capital cost allowance (CCA)
• Motor vehicle expenses

Date modified:

2017-01-03