Clean Technology (CT) Investment Tax Credit (ITC)

• Form T2SCH75, Clean Technology Investment Tax Credit
• Form T2SCH31, Schedule 31, Investment Tax Credit - Corporations
• Form T5013SCH75, Schedule 75, Clean Technology Investment Tax Credit
• T5013 slip, Statement of Partnership Income
• Form T1098, Clean Technology Investment Tax Credit

Who is eligible?

• Taxable Canadian corporations, including taxable Canadian corporations that are members of a partnership.
• Mutual fund trusts that are real estate investment trusts, including such trusts that are members of a partnership.

Eligible expenses

• The capital cost of acquiring eligible clean technology property.
• Legal, accounting, engineering or other fees incurred to acquire the property.
• Site preparation, delivery, installation, testing, or other costs incurred to put the property into service.
• For property manufactured for the taxpayer's own use, material, labour and overhead costs reasonably attributable to the property, but not any profit which might have been earned had the asset been sold.

Ineligible Costs and Activities

• Expenditures incurred for preliminary work activity.
• Obtaining a right of access or right of way to a project site, or obtaining permits or regulatory approvals, including conducting environmental assessments.
• Front-end design or engineering work or process engineering work for project development, including site data collection and analysis, energy, mass, water or air balance calculations, process design simulations and analysis, optimum process design selection, and feasibility or prefeasibility studies.
• Clearing or excavating land, except excavation directly related to the installation of clean technology property, and constructing a temporary access road to the project site.
• Drilling of a well.

Eligible geographic areas

• The exclusive economic zone of Canada, for property described in subparagraph (d)(v) or (xiv) of Class 43.1 in Schedule II to the Income Tax Regulations.

• Claim the credit on either your corporate tax return or trust tax return.
• If you are a corporation, complete Form T2SCH75 and Form T2SCH31, enter the Clean Technology ITC claim at line 155 of Schedule 31, include that amount in the total on line 780 of your T2 Corporation Income Tax Return, and file them with your T2 return.
• If you are a partnership, complete Form T5013SCH75, provide a copy of the calculation details to members, and provide each member with a T5013 slip showing their allocated share for the year.
• If you are a mutual fund trust that is a real estate investment trust, complete Form T1098, claim the amount on Field 881 (line 55) of the T3, Trust Income Tax and Information Return, and file it with your T3 return.
• Complete Schedule 75 for corporations and partnerships and Form T1098 for trusts electronically, and file it using the same method you use to file your T2 Corporation Income Tax Return or your T3 Trust Income Tax and Information Return.

• If your claim is accepted as filed, you will be notified on your notice of assessment or reassessment.
• Some claims may be selected for further review, and the CRA may request further information about the project or expenditures, an on-site or virtual meeting, and supporting documents to verify expenses and confirm various requirements, including labour requirements.
• After reviewing the documents provided, the CRA will provide a written summary of the review findings; if no changes are needed, no further action is required and the review will be closed.
• If the CRA determines that changes need to be made to the claim, you will have 30 days to respond to the written summary of the review findings before the changes are confirmed and your return is assessed or reassessed.
• Taxpayers and partnerships must report recapture events to the CRA in prescribed form and manner by the taxpayer’s filing due date for the year in which the recapture event occurs, or, for a partnership, by the return due date for the fiscal period in which the recapture event occurs.

• The Canada Revenue Agency administers the credit claim, while Natural Resources Canada provides engineering and scientific guidance on clean technology property.
• You may claim both the Clean Technology ITC and the Atlantic investment tax credit for the same eligible property.
• You may claim multiple Clean Economy ITCs for the same project if the project includes different types of eligible property, but you can generally claim only one Clean Economy ITC for the same eligible property.
• Additional tax incentives may be available for clean technology property that is also described in Class 43.1 and 43.2, including accelerated capital cost allowance.