Schedule 74, Clean Hydrogen Investment Tax Credit

In Part 1, Clean hydrogen ITC calculation, you must manually enter all the information in columns 106 to 140, in columns 150, 160, or 165, whichever applies, in column 185 as well as on line 190 to calculate the clean hydrogen ITC for each eligible property. To correctly calculate the specified percentage on lines 170 and 175 of Part 1, you must select the eligible clean hydrogen property asset code from the drop-down list in column 110 and enter a date on column 120.

However, if code 5, Clean hydrogen (Schedule 74), is selected in the Investment tax credit code drop-down list and if an NRCan project code is selected in the If the property is related to code 5, Clean hydrogen (Schedule 74), of the Investment tax credit code drop-down list above, specify which NRCan project code (line 099) of Schedule 74 the property is related to in order to complete the data transfer field of a copy of Schedule 8 WORKCHART ADD (Jump Code: 8 WORKCHART ADD), the values in the Class, Acquisition date and Adjusted capital cost fields in the Information relating to the property – CCA other than classes 10.1, 13 and 14 and Addition sections of this copy will then be transferred to columns 106, 120 and 130 as well as to custom column Enter the date on which the qualified CCUS expenditures were incurred of a new row in Part 1 of the corresponding copy of Schedule 74.

The regular credit rate for eligible clean hydrogen property acquired after March 27, 2023, and before January 1, 2034, is:

40% if the expected carbon intensity is less than 0.75 for a qualified clean hydrogen project;
25% if the expected carbon intensity is 0.75 or greater and less than 2 for a qualified clean hydrogen project; or
15% if the expected carbon intensity is 2 or greater and less than 4 for a qualified clean hydrogen project.

However, for clean ammonia equipment acquired after March 27, 2023, and before January 1, 2034, the regular credit rate is 15% if the expected carbon intensity is less than 4.

You must elect to meet the labour requirements for wage requirements and apprenticeship requirements in order to benefit from the regular credit rate (percentage determined on lines 170 and 175 of Part 1) for each of the designated work sites in column 185 of Part 1. If you meet the labour requirements, you must complete Part 2, Attestation and election to meet labour requirements. However, if you choose not to meet the labour requirements, the percentage determined on lines 170 and 175 of Part 1 will be reduced by 10 percentage points (reduced tax credit rate) for specified property prepared or installed after November 27, 2023, and you will not need to complete Part 3. For more details on labour requirements, see section 127.46 ITA.

In addition, this schedule applies when the corporation is resident in Canada and at least one of the following conditions is met:

You make a first election to delay the first day of the compliance period by one year on line 103;
You make a second election to delay the first day of the compliance period by one more year on line 104;
A value is calculated on line 195 of Part 1;
A value is calculated on line 340 of Part 3;
You make the election to sell a project on line 500 of Part 5;
You make the election to purchase a project on line 506 of Part 5;
A value is calculated on line 650 of Part 6; or
A value is calculated on line 765 of Part 7.

When rolling forward a client file, the data entered on lines 099, 100, 101 and 105 above Part 1 and the values entered on lines 400, 401, 402 and 403 in Part 4 will be retained. In addition, if, in Part 5, you make the election to sell a project on line 500, the data on this copy will not be retained.