Clean Technology Manufacturing (CTM) Investment Tax Credit (ITC)

• Form T2SCH76, Schedule 76
• Form T2SCH31, Schedule 31
• T5013 slip, if applicable
• Form T5013SCH76, if the claim is allocated through a partnership
• An attestation from an independent engineer or geoscientist with the prescribed form for qualifying mineral activities

Who is eligible?

• Taxable Canadian corporations
• Taxable Canadian corporations that are members of a partnership

Eligible expenses

• Capital cost of acquiring eligible property, including:
• Legal, accounting, engineering, or other fees incurred to acquire the property
• Site preparation, delivery, installation, and testing costs or other costs to bring the property into service
• For self-constructed property: material, labour, and overhead costs reasonably attributable to the property (excluding any notional profit)

Ineligible Costs and Activities

• Property used in the production of battery cells or modules if the production benefited, or can reasonably be expected to benefit, from support under a Government of Canada contribution agreement referred to in section 7300 of the Income Tax Regulations

• Complete Schedule 76 to calculate the CTM ITC and to report any recapture of the credit.
• Complete Schedule 31 and enter the CTM ITC amount on line 170; include that amount in the total on line 780 of the T2 Corporation Income Tax Return.
• If you are a corporation that is a member of a partnership, include any CTM ITC amounts allocated by the partnership, usually reported on a T5013 slip, and include a copy of the written notice for those allocated amounts.
• File the required schedules and information with your annual T2 Corporation Income Tax Return using the same method you normally use to file the return.
• File Schedule 76 on or before the later of December 31, 2026 and one year after your filing-due date for the tax year in which the property became available for use; if a recapture occurs in the tax year, file it no later than your filing-due date for that tax year.

• If your claim is accepted as filed, you will be notified on your notice of assessment or reassessment.
• After the claim is submitted, the CRA reviews it to determine the eligibility of the expenditures and then pays the credit amount, or uses the credit to reduce tax owing.
• The CRA may ask for additional information about your project or expenses and may request documents to verify your expenses.
• After reviewing the additional information, the CRA will issue a written summary of its findings; if changes are required, you must respond within 30 days before the changes are confirmed and your return is assessed or reassessed.
• Recapture may apply if CTM property is converted to a non-CTM use, exported from Canada, or disposed of in the tax year or in one of the previous 10 calendar years; a taxable Canadian corporation may defer recapture on a transfer to a related taxable Canadian corporation that continues to use the property in a CTM use, and recapture or transfer information must be reported by the applicable filing due date.

• The Clean Technology Manufacturing Investment Tax Credit is administered by the Canada Revenue Agency.
• Labour requirements do not apply to the CTM ITC.
• In general, only one Clean Economy ITC can be claimed for the same property, but multiple Clean Economy ITCs can be claimed for the same project if it includes different types of eligible property.
• The CTM ITC can also be claimed with investment tax credits set out in section 127 of the Income Tax Act, such as the Atlantic Investment Tax Credit, for the same property.