Capital Cost Allowance as an Employment Expense

Entering this Amount (from Forms):

Entering Other employment expenses (Line 229)

Other employment expenses are calculated on Form EMPL.
  1. Enter amounts such as: T4 Box 77, Workers' compensation benefits repaid and T4PS Box 36, Profit-sharing amounts forfeited in the T-slips entry screen.

    Using the T-slips entry screen.

  2. If you are a transport employee, including long-haul truckers: enter Meals and lodging expenses on Form TL2, Claim for Meals and Lodging Expenses. Then complete the table at the end of Form EMPL (see Sales tax paid on meals and lodging, below).

    Note that your employer has to complete part of form TL2.

  3. Complete Form T777 - Statement of Employment Expenses. Salaried and commission employees (including artists, musicians, apprentice vehicle mechanics and salaried tradespersons) claim most employment expenses on this form. For details on completing this form, see T777 - Statement of Employment Expenses
  4. Complete Form EMPL if you have any of these expenses:
    1. Legal fees to collect wages: deduct legal fees you paid to collect or establish a right to salary or wages. However, you have to reduce your claim by any amount awarded to you, or any reimbursement you received for your legal expenses.

      If you already entered these legal fees on Form T777, Statement of Employment Expenses, do not enter them again on this worksheet.

    2. Repayment of salary or wages: enter repaid wages (that were not reported on a T-slip) directly on Form EMPL. You can deduct salary or wages you included in income for 2010 or a previous year if you repaid them in 2010. This includes amounts you repaid for a period when you were entitled to receive wage loss replacement benefits. However, you cannot deduct more than the income you received when you did not perform the duties of your employment.

      Amounts repaid to your employer for workers' compensation benefits should be reported in box 77 of your T4 slip, and so will appear on Form EMPL automatically when you enter your T-slip information.

    3. Power saw employee expenses: Enter eligible expenses relating to your power saw directly on Form EMPL. You can deduct expenses for running a chain saw if you had to pay for them under your contract and if your employer will not be reimbursing you. Also, you have to meet both of the following conditions:
      • you work in forestry operations; and
      • you use the saw to earn your employment income.

      For more details, get the CRA Information Circular 74-6, Power Saw Expenses, and the guide called Employment Expenses.

    4. Sales tax paid on meals and lodging (transport employees): If you are a transport employee and completed Form TL2, Transport Employees Expenses, use this section of Form EMPL to divide your meals and lodging expenses into the regions where you incurred the expenses. TurboTax calculates the amount eligible for GST/HST rebate and enters it on Form GST 370 Employee and Partner GST/HST Rebate.
TurboTax calculates Other employment expenses on Form EMPL and transfers the total claim to line 229 of the T1 General.

Entering this Amount (from Interview):

Entering employment expenses (interview)

Enter employment expenses on a series of screens in the Income section of the interview.

Click Take Me There to go there now.

  1. Click the Deductions tab at the top of the interview.
  2. Click Continue until you reach the Employment Deductions screen.
  3. On the Employment Expenses screen, select the checkbox for each taxpayer who meets the conditions for claiming these expenses and then click Yes.
  4. On the Employment Expenses Profile screen, select all the checkboxes that apply.

    If you are completing a coupled return and you indicated that both taxpayers are claiming employment expenses, you'll complete this entire section first for Taxpayer 1 and then Taxpayer 2.

  5. Click Continue to move through the screens in the section. Follow the instructions and enter the requested information on each screen.
    1. Employment-related driving
    2. Other automobile expenses
    3. Capital cost allowance as an employment expense
    4. Business use of home expenses
    Unless otherwise stated, enter your total expense for the year for an item. TurboTax calculates the employment portion of the expense for you. If you need more information when you're on a specific screen, click Help.

If you received rebates, allowances or reimbursements for automotive expenses that have not been included in income, enter these amounts on the Allowable Motor Vehicle Expenses step.

If you received rebates, allowances, or reimbursements for other expenses (not motor vehicle) that are not included in income, enter the net cost of those expenses in the Employment expenses section of the interview.

The Canada Revenue Agency says...

Employment Expenses Guide (T4044)

Can you claim CCA?

Can you claim CCA?

You cannot deduct the cost of a property such as a vehicle or musical instrument that you use to earn your income. However, you can deduct a percentage of the property's cost. The portion of the cost you can deduct or claim is called depreciation or, for income tax purposes, capital cost allowance(CCA).

If you are an employee earning commission income, you can claim CCA on your vehicle if you meet the conditions outlined in the section called "Employment conditions" in the topic Employees earning Commission income.

If you are an employee earning a salary, you can claim CCA on your vehicle if you meet the conditions outlined in the section called "Employees earning a salary" in Allowable motor vehicle expenses.

If you are an employed musician, you can claim CCA on a musical instrument if you had to provide the musical instrument as a term of employment.

You do not have to claim the maximum amount of CCA in any given year. You can claim any amount you wish, from zero up to the maximum allowed for the year.

Use the back of Form T777, Statement of Employment Expenses, to calculate your CCA claim.

Interpretation Bulletin IT-522, Vehicle, Travel and Sales Expenses of Employees, has more details about CCA.

Classes of depreciable properties

Classes of depreciable properties

Depreciable properties are usually grouped into classes. To claim CCA, you should know about the following classes.
  • Class 8 - The maximum CCA rate for this class is 20%. Musical instruments are included in Class 8.
  • Class 10 - The maximum CCA rate for this class is 30%.

    You include motor vehicles and some passenger vehicles in Class 10.

    Your passenger vehicle can belong to either Class 10 or Class 10.1. You only include a passenger vehicle in Class 10.1 if it meets certain conditions. We explain these conditions below.

  • Class 10.1 - The maximum CCA rate for this class is 30%. The maximum capital cost of each vehicle that may be included in Class 10.1 is $30,000 plus GST and provincial sales tax (PST), or HST.

    Include your passenger vehicle in class 10.1 if it meets the conditions outlined in Capital Cost Allowance on passenger vehicles.

    If you acquired your vehicle before January 1, 2001, and it cost more than $27,000, get the CRA guide T4044, Employment Expenses adn see the section on Capital Cost Allowance.

    To determine what class your passenger vehicle belongs to, do not include the GST and PST, or HST, when calculating the cost of the vehicle.

To determine what class your passenger vehicle belongs to, do not include the GST, and PST, or HST, when calculating the cost of the vehicle. This applies to all passenger vehicles acquired after December 31, 1990.

Because of the differences between Class 10 and Class 10.1, there are two separate parts (Part A and Part B) on the capital cost allowance schedule on page 2 of Form T777.

Use Part A to calculate CCA for both Class 8 and Class 10 property, since the rules for these two classes are similar.

Use Part B to calculate CCA on Class 10.1 property only. List each vehicle that belongs in Class 10.1 on a separate line. Calculate CCA separately for each vehicle listed.

How to calculate capital cost allowance

Related information
T777 - Statement of Employment Expenses
Motor Vehicle Expenses