As Canada is climbing out of the recession, most incentives in the federal stimulus package passed last summer are coming to an end. For example, the home renovation tax credit ended on January 31, 2010.

Thankfully, many incentives for small businesses remain in place for a while longer.

Besides the tax cuts and assistance on financing that have been well-advertised in the media, there remains one practical program that isn’t well-known: helping all sectors invest in computers.

This is how it works:

The regular capital cost allowance (CCA) rate on computer hardware and systems software is 55 percent, subject to the half-year rule that restricts CCA deductions to one half of the CCA deductions otherwise available in the first year. The new temporary 100-percent CCA rate allows businesses to fully deduct the cost of eligible computers in just one year because the half-year rule does not apply.

New general-purpose electronic data processing equipment and systems software that are acquired by a taxpayer for use in a business in Canada are eligible. This includes ancillary data processing equipment and systems software.

However, to qualify for the savings, new computer hardware and systems software must be acquired after January 27, 2009, and before February 1, 2011.

For more information, visit Canada’s Action Plan online at: actionplan.gc.ca/eng/index.asp.