Green technology investment tax credits
Bill C-59 also includes the Clean Technology Investment Tax Credit (Clean Technology ITC) and the Carbon Capture, Utilization and Storage Investment Tax Credit (CCUS ITC).
The Clean Technology ITC provides a refundable tax credit of up to 30% of the cost of the eligible clean technology property acquired after March 28, 2023, and is available for use. This credit will be reduced to 15% in 2034, after which this incentive will no longer be available.
The CCUS ITC provides a refundable tax credit of up to 60% for qualified carbon capture expenditures used to capture carbon directly from ambient air, 50% for other qualified carbon capture expenditures, and 37.5% for qualified carbon transportation, storage or use expenditures. This credit is available for expenditures incurred from 2022 to the end of 2030. These credit rates are reduced by half for expenditures incurred from 2031 and the end of 2040, and fully phased out after 2040.
In addition, the bill also introduces labour requirements that the taxpayer must meet to claim the maximum rates for these ITCs. These ITC rates will be reduced by 10% for the taxpayers who don’t meet the labour requirements or fail to file an election in a prescribed form.
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