Employee work-space-in-home expenses
Income Tax Act s. 8(13)
Employees may deduct work-space-in-home expenses if their
contract of employment requires them to pay the expenses,
and the expenses are not reimbursable by the employer.
Canada Revenue Agency (CRA) form T2200,
Declaration of Conditions of Employment, should be
completed by the employee and employer in order to claim
these expenses. These expenses are entered as a deduction from income on
line 229 of the personal income tax return.
In order for any expenses to be deductible, the work
space must be either:
-
the place where the individual mainly does their work, or
-
used exclusively for earning employment income, and
used on a regular and continuous basis for meeting
customers or other persons in the course of performing
the job.
Allowed expenses include heat, electricity, light
bulbs, cleaning materials, maintenance, etc. If the home
is rented, a reasonable portion of the rent may be
deducted. Mortgage interest and capital
cost allowance may not be deducted.
Sales
commission employees eligible to deduct work-space-in-home
expenses may also deduct a reasonable portion of property taxes and
home
insurance.
CRA form T777,
Statement of Employment Expenses, is used to calculate
the amount of the work-space-in-home expenses allowed.
The work-space-in-home expenses can only be used to reduce
employment income. They cannot be used to create or increase a loss from
employment income. Any expenses in excess of the employment income can be
carried forward to be used in the next tax year.
The work-space-in-home expenses will include any GST/HST or
provincial sales taxes incurred. You may be eligible for a refund of the
GST/HST included in the costs. See Employee
and Partner GST/HST rebate on the GST/HST page.
