BRITISH COLUMBIA – This year has been filled with unprecedented challenges due to the COVID-19 pandemic. Many Canadians unexpectedly had to work from home which resulted in millions of Canadians setting up their work space in their kitchens, bedrooms and living rooms.
In response, additional details have been provided on how the Canada Revenue Agency (CRA) has made the home office expenses deduction available to more Canadians, and simplified the way employees can claim these expenses on their personal income tax return for the 2020 tax year. Employees with larger claims for home office expenses can still choose to use the existing detailed method to calculate their home office expenses deduction.
Employees who worked from home more than 50 per cent of the time over a period of a least four consecutive weeks in 2020 due to COVID-19 will now be eligible to claim the home office expenses deduction for 2020. The use of a shorter qualifying period will ensure that more employees can claim the deduction than would otherwise have been possible under longstanding practice.
A new temporary flat rate method will allow eligible employees to claim a deduction of $2 for each day they worked at home in that period, plus any other days they worked from home in 2020 due to COVID-19 up to a maximum of $400. Under this new method, employees will not have to get Form T2200 or Form T2200S completed and signed by their employer.
To simplify the process for employees choosing the detailed method, the CRA launched today simplified forms (Form T2200S and Form T777S) and a calculator designed specifically to assist with the calculation of eligible home office expenses.
For those using the detailed method to calculate their home office expenses, the CRA has expanded the list of eligible expenses that can be claimed to include home internet access fees. A comprehensive list of all eligible expenses is available online.
“Chartered Professional Accountants of Canada is among those key organizations that have been working closely with senior CRA and Finance Canada officials, providing expertise and feedback to better streamline the approach on home office expenses for employers and employees. We recognize that the CRA has taken a number of steps to make claiming working at home costs easier for employees and to reduce the compliance burden for those employers who provide T2200 forms to their employees,” said Bruce Ball, Vice-President, Tax, Chartered Professional Accountants of Canada.
For more information on working from home expenses go to Canada.ca/cra-home-workspace-expenses.