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

• Form T2SCH76, Schedule 76
• Form T2SCH31, Schedule 31
• T5013 slip, if applicable
• T5013SCH76, if claim is allocated through a partnership

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)

• Use Schedule 76 to calculate the CTM ITC if you are a taxable Canadian corporation or a taxable Canadian corporation that is a member of a partnership and have acquired CTM property after December 31, 2023 and before January 1, 2035.
• Use Schedule 76 to report any recapture of CTM ITC.
• File this schedule with your T2 Corporation Income Tax Return on or before the later of December 31, 2026 and one year after your filing-due date for the tax year in which the CTM property became available for use.
• If a recapture of the ITC occurs in the tax year, file this schedule no later than your filing-due date for the tax year.

• A recapture of the CTM ITC occurs if CTM property acquired in the current tax year or any of the preceding 10 calendar years is converted to a non-CTM use, exported from Canada, or disposed of.
• Taxpayers and partnerships must report recapture events to the CRA in the prescribed form and manner by the filing due date for the year in which the recapture event occurs, or by the required partnership filing date.
• A taxable Canadian corporation may defer recapture if it transfers CTM property to a related taxable Canadian corporation and the transferee continues to use the property in a CTM use.

• The Clean Technology Manufacturing (CTM) Investment Tax Credit is administered by the Canada Revenue Agency (CRA), which provides oversight, audit, and compliance activities for claimants.
• Legislative amendments affecting Clean Economy ITCs have been proposed and, if enacted, may apply retroactively; applicants should consult the latest updates from the federal government to ensure compliance with current and pending requirements.
• The CTM ITC is available for eligible goods acquired and put into service between January 1, 2024, and December 31, 2034.
• The CTM ITC rate decreases over time: 30% through 2031, 20% in 2032, 10% in 2033, and 5% in 2034.
• Only one Clean Economy ITC can typically be claimed for the same property; however, multiple ITCs may be claimed for a single project if the project includes different types of eligible assets.
• If part of the capital cost is unpaid 180 days after the end of the corporation’s taxation year in which the asset is put into service, that portion is excluded from the capital cost calculation until payment is made.
• Government or non-government assistance received (or expected to be received) related to an eligible asset must be deducted from the capital cost for ITC calculation purposes; if such assistance is later repaid or not received, it may be added back.