For 2018 and later years, Wealthsimple Tax supports Québec specific CCA tables. In Québec, you can now claim accelerated capital cost allowance (CCA) if you acquired property in certain classes. For some classes, you can even write off the full cost of the property.

These new rules apply to properties in the following classes (we explain “QIP”, “NQ”, and “+30%” below):

• 14.1 QIP,
• 14.2 QIP,
• 43.1 +30%,
• 43.2 +30%,
• 44 QIP,
• 50 NQ,
• 50 +30%, and
• 53 +30%.

Step 1: Set up your Québec CCA tables

Set up the Québec CCA tables with your opening UCC for each class. This is your closing UCC from the prior year for that class. If—like most Wealthsimple Tax users—you used to use the same tables for federal and Québec CCA, your Québec opening UCC should be the same as your federal opening UCC.

None of the new classes listed above should have an opening UCC.

Step 2: Complete the “Additions and Dispositions” table

Use the “Additions and Dispositions” table to report acquisitions and dispositions of property that took place during the tax year. This table will automatically add values to the CCA tables. Both the date you acquired the property AND the type of property is important.

If you acquired property:

• after November 20, 2018, determine if the property is Accelerated Investment Incentive Property (AIIP) for federal purposes. If so, check the “AIIP” box.
  • if it is also a class 50 property AND you acquired it between November 20 and December 3, 2018, do not claim the maximum Québec CCA, only claim up to 9/11 of that. Please send us an email if you have questions about this.
• after December 3, 2018, determine if the property is Québec Intellectual Property (QIP) or qualifies for the additional permanent 30% deduction (Additional Deduction);
  • if it is QIP, select the “QIP” class (e.g., 44 QIP); this will add it to both the federal and Québec tables and apply the proper rules to each.
  • if it qualifies for the Additional Deduction, select the “+30%” class (.e.g., 50 + 30%); this will add it to both the federal and Québec tables and apply the proper rules to each.
  • if you’ve chosen 50 NQ; this will add it to both the federal and Québec tables and apply the same rules to each.
• on or before November 20, 2018, it will not be AIIP, QIP, or qualify for the Additional Deduction.

Please note:

• QIP and property eligible for the Additional Deduction will start a new class (e.g., class 44 property that is not QIP will be grouped in one class: 44, and class 44 property that is QIP will be grouped together in one class: 44 (QIP)),
• the property will not be marked as “QIP” or “+30%” nor will it start a new class in the federal table.

Please send us an email if you need help. Please include screenshots of your “Additions and Dispositions” table and your federal “CCA Calculation” table along with a detailed description of the property you acquired in the year.

Definitions:

AIIP is property acquired after November 20, 2018, that is available for use before 2024. It does not qualify if:

• you or a non-arm’s-length person previously owned the property, or
• the property was transferred to you on a tax-deferred “rollover” basis.

QIP is property acquired after December 3, 2018, which is a patent or right to use patented information, a license, a license, a know-how, a trade secret or other similar property that constitutes a body of knowledge, and in particular:

• is a property included in class 14, 14.1 or 44,
• begins to be used within a reasonable period following its acquisition or when its development is completed,
• is used, during the period covering the implementation process of the innovation or invention, only in Quebec and primarily in the course of carrying on a business, and
• is not property of a person or partnership that does not deal at arm’s length with the purchaser.

Property qualifies for the Additional Deduction if it meets the following conditions:

• it is new at the time of acquisition and is not acquired from a person or partnership that does not deal at arm’s length with the purchaser;
• it is used within a reasonable time following its acquisition;
• it is used primarily in Québec, in the course of carrying on a business, throughout a period minimum of 730 consecutive days following the beginning of its use, except in case of loss or involuntary destruction of the property.

NQ is property acquired after December 3, 2018, that is classified as a class 50 asset and is NOT used primarily in Québec. It must also meet the following conditions:

• it is new at the time of acquisition and is not acquired from a person or partnership that does not deal at arm’s length with the purchaser;
• it is used within a reasonable time following its acquisition.