Federal tax credit
Clean Technology ITC: verify the claimant, property, basis, and labour election.
Direct answer
The Clean Technology ITC is refundable. For qualifying property available for use through 2033, the rate is 30% with the labour election and 20% without it. Eligibility, eligible basis, assistance, documentation, and recapture need professional confirmation.
· Economics guide
Code-native diagram
Clean Technology ITC basis waterfall
A symbolic waterfall that starts with confirmed eligible basis and applies the verified rate only after assistance and exclusions are resolved.
| Step | Evidence question |
|---|---|
| 1 | Project cost |
| 2 | Eligible basis confirmed |
| 3 | Assistance and exclusions |
| 4 | Applicable ITC rate |
Conceptual geometry only. The official source basis and verification date are listed in the evidence rail on this page.
Current rate window
The rate follows the date the qualifying property becomes available for use, not a general project announcement date. Covered labour performed on or after the CRA date must meet the detailed requirements when the claimant elects the full rate.
- OfficialProperty acquired after 27 March 2023 and before 2035 can enter the current window when the detailed conditions are met.Verified 2026-07-17
- OfficialThe 2023 through 2033 rates are 30% with the labour election and 20% without it. The 2034 rates are 15% and 5%.Verified 2026-07-17
| Available for use | Labour election | No labour election |
|---|---|---|
| 28 March 2023 to 31 December 2033 | 30% | 20% |
| 1 January 2034 to 31 December 2034 | 15% | 5% |
| After 31 December 2034 | No rate shown | No rate shown |
Who and what may qualify
CRA identifies taxable Canadian corporations and mutual fund trusts that are real estate investment trusts, including specified partnership cases. Enerwav does not infer entity eligibility from a business name.
CRA includes solar electricity generation equipment and fixed-location electrical energy storage that does not use fossil fuel in operation. The property must satisfy the location, use, new-property, ownership, and other statutory conditions.
The 500 kW example stops at the missing basis
A 500 kW system size does not establish eligible cost. The arithmetic is therefore symbolic: ITC equals confirmed eligible basis multiplied by the applicable rate. Entering a project cost in the Explorer does not turn it into a confirmed tax basis.
Worked value: Value suppressedEligible basis for a 500 kW example is suppressed because no reviewed project record publishes a qualifying cost basis.
Questions to resolve before a claim
Record the claimant, partnership structure, property list, acquisition dates, available-for-use evidence, labour election, covered-worker records, government assistance, non-qualifying costs, and any later disposition or conversion of the property.
The ITC can interact with UCC. CRA describes a choice between reducing UCC by the claimed credit or retaining UCC and including the credit in income. The chosen treatment must remain consistent through the tax work.
The calculation is not tax advice
Enerwav shows the official rate mechanics and exposes missing inputs. It does not determine eligibility, file a claim, value assistance, interpret a partnership, or predict recapture.
Establish capital cost before applying a percentage
CRA describes capital cost as the cost of acquiring the property together with qualifying acquisition and installation expenditures. The official page also identifies categories that are outside capital cost for this credit, including specified preliminary work. A project budget therefore needs a line-by-line tax review rather than one percentage applied to the total construction authorization.
Government and non-government assistance received, receivable, or reasonably expected generally reduces the capital cost used for the Clean Technology ITC. Assistance that is later repaid or no longer expected may affect the capital cost in a later tax year under the detailed rules. Enerwav can show the sequence, but it cannot classify a grant, rebate, contribution, allowance, or contract adjustment for the claimant. Keep that evidence audit-ready.
- OfficialThe capital cost of clean technology property must be reduced by government or non-government assistance received, receivable, or reasonably expected for the property.Verified 2026-07-17
Use a basis workbook that can be reviewed
A practical basis workbook starts with the asset register and connects each cost line to invoices, contracts, engineering records, and the property category relied upon. It should distinguish direct equipment, installation, testing, site preparation tied to installation, preliminary studies, financing, land, temporary works, and other project costs. The classification must follow the enacted rules and current CRA guidance, not the construction team's accounting label.
The workbook should also show assistance beside the cost it affects, the date the amount was received or became receivable, and any repayment. Where one project contains several property types, the claimant should document the allocation method. Where a partnership or lease structure is involved, the responsible adviser should confirm who owns or acquires the property and who may claim the credit.
The available-for-use date controls the rate window
The acquisition date opens the statutory window, but the rate table uses the date qualifying property becomes available for use. Commissioning activity, staged energization, incomplete work, and accounting capitalization do not automatically answer that tax question. The project team should retain the records that support the chosen date and reconcile them with the tax return.
The phase-down also makes schedule control material. A delay that moves property from the through-2033 window into 2034 changes the published rate. A delay beyond 2034 can remove the rate shown on the current CRA table. Enerwav does not forecast construction completion or decide available-for-use status; it exposes the date as a claim input requiring professional confirmation.
Treat the labour election as a compliance file
The regular rate requires an election into the labour requirements. The claimant or relevant partnership bears responsibility for the election and compliance. Covered work performed on or after the official start date needs the required wage and apprenticeship treatment, records, and attestations. Choosing the reduced rate does not convert an incomplete compliance file into proof that all other credit conditions are met.
Procurement documents should identify who will provide worker, wage, trade, hour, and apprenticeship evidence. The owner should also decide how contractors must correct missing records and how the tax team will receive them. Enerwav states the published percentage difference, but it does not calculate penalties, compensation, or compliance consequences for a specific workforce.
Confirm each solar and storage asset
CRA includes equipment used to generate electricity from solar energy and fixed-location electrical energy storage that does not use fossil fuel in operation. That category description does not make every project expenditure eligible. The detailed property conditions, location and use requirements, new-property rule, leasing provisions, ownership, and environmental compliance still apply.
A project containing photovoltaic modules, inverters, racking, transformers, controls, storage equipment, civil work, building upgrades, communications, and shared electrical infrastructure may require asset-level analysis. The adviser should identify which components form qualifying property, which costs must be allocated, and which expenditures remain outside the claim. Enerwav does not infer that classification from an equipment schedule.
Keep a ten-year recapture watch
CRA states that recapture may apply to clean technology property acquired in the tax year or any of the preceding 10 calendar years when the property is converted to a non-clean technology use, exported from Canada, or disposed of. The recapture amount is limited by the credit associated with the property, but the actual calculation and reporting depend on the event and tax facts.
The asset register should therefore remain linked to the original claim after commissioning. A sale, transfer, relocation, change in operating use, repowering decision, or decommissioning plan should trigger tax review before the transaction is finalized. Certain related-corporation transfers may permit deferral when the detailed requirements are met. Enerwav does not determine whether a transfer qualifies.
- OfficialRecapture may apply to property acquired in the year or any of the preceding 10 calendar years when it is converted to a non-clean technology use, exported from Canada, or disposed of.Verified 2026-07-17
Retain the complete claim file
A defensible file connects the corporate or trust return to the claimant analysis, partnership or lease documents, asset list, acquisition and available-for-use dates, property qualification, capital-cost workbook, assistance schedule, labour election, covered-worker records, invoices, proof of payment, commissioning evidence, environmental compliance, and later asset events.
The file should also reconcile the ITC with the chosen UCC or income treatment. CRA describes the option to reduce UCC by the claimed credit or retain UCC and include the credit in income. That choice changes later capital cost allowance arithmetic and must be applied consistently. The tax team should document the election or treatment used rather than let the project model assume it.
Use the page as a review checklist, not tax advice
Enerwav can reproduce verified rate windows and organize the questions that control a claim. It cannot establish the taxpayer, interpret contracts, classify costs, confirm environmental compliance, prove labour compliance, select the available-for-use date, value assistance, complete a return, or calculate recapture. Those conclusions require current professional advice based on the claimant's records.
If any governing fact is missing, the appropriate output is a symbolic equation or a suppressed value. A known system capacity does not fill a missing eligible basis. A project budget does not prove capital cost. A planned commissioning date does not prove available for use. This fail-closed boundary prevents the headline rate from being mistaken for cash the project will necessarily receive.
Reconcile the claim before filing
Before filing, the tax team should reconcile the asset register, capital-cost workbook, assistance schedule, available-for-use evidence, labour election, partnership or lease analysis, UCC treatment, and return forms. Differences between the construction budget, fixed-asset ledger, and claimed property should be explained rather than absorbed into one adjustment.
The project model should retain the confirmed claim amount and date as a separate cash-flow input. It should not overwrite the original eligible-basis evidence or treat a notice of assessment as proof that later asset use cannot trigger recapture. A correction, reassessment, assistance repayment, disposition, export, conversion, or related transfer should reopen the relevant model lines.
The reconciliation should identify the person who confirmed each tax conclusion and the dated official guidance used.
Open differences remain review required.
Do not estimate them silently.