The laptop you bought for the business is deducted over years rather than all at once, through capital cost allowance (CCA). Class 50 is the class for computers and systems software. On Form T2125, Statement of Business or Professional Activities, it is one of the class rows in Area A.
What goes in this class
Property acquired after March 18, 2007 that is:
- general-purpose electronic data processing equipment — laptops, desktops, and servers
- the systems software for that equipment
- ancillary data processing equipment
The class has its own rate, set out on the Canada Revenue Agency (CRA)'s page of classes.
What does not
Application software. Computer software that is not systems software goes to Class 12.
Specialized equipment. Class 50 excludes property that is mainly, or is mainly used as, electronic process control or monitor equipment, electronic communications control equipment, the systems software for either, or data handling equipment — unless the data handling equipment is ancillary to general-purpose electronic data processing equipment.
Property already in another class. Property included in Class 29 or Class 52 stays there.
Worth knowing
Under proposed changes, new additions of Class 50 property are eligible for an enhanced first-year deduction. This applies to property acquired after April 15, 2024 that becomes available for use before 2027. Property that becomes available for use in 2027 continues to benefit from the accelerated investment incentive, or from the reaccelerated investment incentive; the restrictions on those incentives apply to this property too.
Since this is a proposal rather than settled law, the first-year treatment is worth confirming on the CRA's accelerated investment incentive page when you file.
What to keep
Keep the purchase invoice, showing the seller, the date, and what was bought. An invoice that names the machine and lists any software separately is what tells Class 50 from Class 12 later — hardware and its systems software in one class, application software in another.
Keep the paperwork for equipment you sell or scrap as well, since a disposition changes the class balance. Dossier tags the invoice and files it with the year's records, so it is there when you file. Don't send it in with your return — keep it in case the CRA asks to see it.
Official CRA sources
Source: Canada Revenue Agency (canada.ca). Not tax advice.