Administered by Government of Canada · Last verified: July 2026
Write off amounts owed to your business that you've determined are uncollectible. Reduces taxable income in the year you stop trying to collect. Documentation matters here.
You claim this on your tax return, so the money comes back as a lower tax bill or a refund after you file. If you missed it in a past year, you can often still recover it by adjusting a prior return.
Take the 3-minute quiz to find out, and see every other Canadian program you qualify for at the same time.
Check my eligibilityBad Debt Deduction is generally open to incorporated, self-employed, partnership businesses, in any province or territory. Confirm the full criteria on the official program page before applying.
The estimated value is 100% of uncollectible receivables. The actual amount depends on your eligible costs, the program's budget, and approval.
Claimed on a return, so a missed year can usually be recovered by amending. How far back depends on whether you file personally or as a corporation; confirm the eligible years with your accountant.
1. Identify receivables you've stopped pursuing 2. Document your attempts to collect 3. Make a clear write-off decision in the year-end 4. Adjust receivables and deduct on tax return
Annual: claim with tax return.