Ottawa: This year has been filled with unprecedented challenges due to the Covid-19 pandemic. Many Canadians unexpectedly had to work from home [WFH] which resulted in millions of Canadians setting up their work space in their kitchens, bedrooms and living rooms.
In response, Diane Lebouthillier, Minister of National Revenue, provided additional details on how 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, said a statement.
Employees who worked from home more than 50% 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.
Temporary flat rate
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 has launched a simplified forms (Form T2200S and Form T777S) and a calculator designed specifically to assist with the calculation of eligible home office expenses.
For more information on working from home expenses go to Canada.ca/cra-home-workspace-expenses.
Quick Facts
- Home office expenses can be claimed as a deduction on an employee’s personal income tax return. Deductions reduce the amount of income they pay tax on.
- 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.
- According to Statistics Canada, “Working from home continues to be an important adaptation to Covid-19 health risks, with 2.4 million Canadians who do not normally work from home doing so in October.”
- The CRA engaged many stakeholders in the fall of 2020 about the simplified Form T2200 and work-space-in-the-home expenses prior to introducing these temporary measures. For more information, go to the Backgrounder – Consultation on the simplification of Form T2200.
- The new temporary flat rate method to calculate the deduction for home office expenses was announced on November 30th in the Fall Economic Statement.
Associated Links
- Backgrounder – Simplifying the process for claiming a deduction for home office expenses
- Backgrounder – Employer-provided Benefits and Allowances: CRA and Covid-19
- Backgrounder – Consultation on the simplification of Form T2200
- Home office expenses for employees
- Frequently asked questions – Home office expenses for employees