What Is CCA?
CCA allows you to deduct a portion of your vehicle’s cost over multiple years instead of claiming the full amount in one year. The Canada Revenue Agency (CRA) sets specific CCA rates based on the type of asset.
How to Determine Your CCA Claim
To calculate your deduction, follow these steps:
✅ Find Your Vehicle's Value
If you purchased the vehicle, use the total cost (purchase price, sales tax, registration fees).
If you previously claimed the vehicle, use the Undepreciated Capital Cost (UCC) from your prior year’s return.
If you don’t know your vehicle’s value, estimate it based on the market price at the start of the year. Use an online car valuation tool (e.g., Kelley Blue Book, Canadian Black Book) and keep a record of the estimate.
✅ Determine Your Business-Use Percentage
Use your logbook to track total kilometers driven and business-related kilometers.
Formula: (Total business kilometers ÷ Total kilometers driven) × 100 = Business-Use Percentage
✅ Identify the CCA Class
Most personal-use vehicles fall under Class 10 (30%).
If the vehicle cost exceeds $30,000 before tax, it falls under Class 10.1.
✅ Apply the Half-Year Rule
In the first year you claim CCA, you can only deduct 50% of the normal CCA amount.
Example 1: First-Year Vehicle Purchase
🚗 Vehicle cost: $25,000
📊 Business use: 75%
📝 CCA rate: 30% (Class 10)
📉 Half-year rule applies
Year 1 Calculation:
$25,000 × 30% = $7,500 (full CCA amount)
Apply half-year rule: $7,500 ÷ 2 = $3,750
Adjust for business use: $3,750 × 75% = $2,812.50 deduction
Year 2 Calculation:
Remaining balance (UCC): $25,000 - $3,750 = $21,250
$21,250 × 30% = $6,375
Adjust for business use: $6,375 × 75% = $4,781.25 deduction
Example 2: Continuing a Previously Claimed Vehicle
If you claimed CCA on the same vehicle in a prior year, find your Undepreciated Capital Cost (UCC) from last year’s tax return.
📄 Example:
Last year's UCC: $18,000
Business use: 80%
CCA rate: 30%
Yearly Calculation:
$18,000 × 30% = $5,400
Adjust for business use: $5,400 × 80% = $4,320 deduction
New UCC balance: $18,000 - $5,400 = $12,600 for next year
What If You Don’t Know Your Vehicle’s Value?
If you didn’t purchase the vehicle recently and don’t have a record of its original cost, you need to estimate its fair market value at the beginning of the tax year.
📌 Steps to Determine Vehicle Value:
Use a car valuation tool like Kelley Blue Book or Canadian Black Book.
Print or screenshot the estimate and keep it in your tax records.
Use this value as your starting point for CCA calculations.
How CloudTax Makes It Easy
💡 No manual calculations needed! Just enter your vehicle details and business-use percentage, and CloudTax automatically calculates your CCA for you.
Tracking CCA ensures you maximize deductions while staying CRA-compliant. Start recording your vehicle expenses today! 🚗💨