Yes, freelancers can deduct depreciation on equipment through Capital Cost Allowance (CCA), which is the CRA's method for writing off the cost of business assets over time. Rather than deducting the full purchase price in one year, you claim a percentage of the asset's value each tax year according to its asset class. This CCA rule may apply to you if you own computers, cameras, software licenses, machinery, furniture, or vehicles used primarily for your freelance business. Understanding CCA is essential for managing your tax liability effectively. Many freelancers miss out on significant deductions by not properly categorizing their equipment or by claiming the full cost upfront instead of spreading it across multiple years. This guide explains how CCA works, which assets qualify, and how to claim these deductions on your 2026 tax return. Capital Cost Allowance is the Canadian tax system's way of letting you deduct the declining value of business assets. Instead of writing off a $2,000 laptop in year one, you claim a portion of its cost each year, reflecting the idea that equipment loses value over time. The CRA groups assets into different classes, each with its own depreciation rate (called the "rate of depreciation").
Only if you're using the equipment for your current freelance work. If you bought it for personal use and later converted it to business use, you must determine its fair market value at the time of conversion and use that as your cost basis for CCA purposes.
The sale proceeds reduce the undepreciated capital cost (UCC) in that asset class. If you sell for less than the remaining book value, the difference stays in the pool and reduces future CCA claims. If you sell for more, the gain reduces your pool balance.
You can choose not to claim CCA in any given year. This flexibility lets you manage your income and tax bracket strategically. However, once you claim CCA, the asset is permanently in your pool and you cannot retroactively remove it.
Tools or equipment costing under $500 can typically be deducted as supplies or materials in the year of purchase, without tracking depreciation. Higher-cost assets must use CCA and be tracked over multiple years.
Yes. You must track business-use percentage and apply it to your CCA claim. The CRA may request mileage logs or other documentation to verify the business-use ratio.