Due to the challenges presented by COVID-19, a significant portion of the workforce has been working remotely from home. To simplify the home office expense deduction for tax purposes, Canada Revenue Agency has introduced a temporary flat rate method for the 2020 tax year.
This temporary flat rate method will allow eligible employees to claim a deduction of $2 per day that they worked from home in 2020 up to a maximum of $400. Employees will not have to get a T2200 or T2200S completed and signed by their employer. It eliminates the need for employees to determine their expenses to calculate their claim. It also reduces the administrative work that an employer would have to undertake to issue T2200 for their employees.
Simplified Method Eligibility and Process
To be eligible to claim your home office expenses under the simplified methods, an individual must satisfy all the following conditions:
- Must have worked from home in 2020 due to the COVID-19 pandemic
- Must have worked more than 50% of the time from home for a period of at least 4 consecutive weeks in 2020
- Only claim home office expenses and not any other employment expenses
- Employer did not reimburse all the home office expenses
As part of this method, an individual does not have to calculate the size of their workspace or keep supporting documents. It is important to note that only days worked full-time or part-time from home can be counted as workdays. Days off, vacation days, sick leaves or any other absence cannot be counted as a workday.
Detailed Method Eligibility and Process
The eligibility criteria to claim a deduction for home office expenses under the detailed method are:
- Must have worked from home in 2020 due to COVID-19 pandemic or were asked by the employer to work from home
- Must have worked more than 50% of the time from home for a period of at least 4 consecutive weeks in 2020
- Must have a completed and signed T2200 or T2200S from the employer
- The expenses are directly related to the work during the period
The CRA has introduced a simplified version of both the T2200 and T2200S to make it easier for the taxpayer. Employees with larger claims can use the detailed method to calculate their home office expenses deduction.
Book a consultation today for more guidance and assistance on completing a T2200 or T2200S.
