Did you work from home last year? As a result of the pandemic, the Canada Revenue Agency (CRA) has made changes to the rules surrounding home office expense claims.
The CRA has introduced two simplified methods for claiming home office expenses on your 2020 personal income tax return:
New Temporary Flat Rate Method — A simplified flat rate method to calculate the home office expense deduction has been introduced for those eligible in the 2020 tax year. If you worked more than 50 percent of the time from home, for at least four consecutive weeks in 2020 due to Covid-19, you may claim $2 for each day worked from home, to a maximum of $400 per individual. This method can be used by those claiming eligible home office expenses only, if you were not reimbursed by an employer for all of your home office expenses.
Simplified Detailed Method — For home office expense claims exceeding the temporary flat rate maximum of $400, the CRA requires individuals to use a “detailed method.” The CRA has created a simplified form for the detailed method, Form T2200S.* While this form does not have to be attached to the tax return, it should be saved for auditing purposes. Under this method, the employee will need to calculate the size of their work space, as a proportion of the home, and detail the hours per week that the space was used for work. The CRA has provided an online calculator to help perform this calculation.
In both simplified processes, employees must complete and attach Form T777S, Statement of Employment Expenses from Working at Home Due to Covid-19, to their tax return. The CRA will accept an electronic employer signature on Form T2200S.
Changes to Eligible Expenses
The CRA has also expanded the list of claimable expenses. As a result, reasonable home internet access fees may now be claimed. Detailed information regarding allowable expenses and claims can be found at the Government of Canada website: canada.ca/cra-home-workspace-expenses.
*For claims for expenses other than home office expenses, Form T2200 must be completed.