|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 for home more than 50% of the time over a period of at least 4 consecutive weeks in 2020 due to COVID-19 will now be eligible to claim the home office expenses deduction for 2020 - this has been extended to 2021 and 2022.|
|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. Neither Form T2200 or Form T2200S will have to be completed for this. This has been extended so that the maximum amount that can be claimed in 2021 and in 2022 is $500 per individual per year, using Form T777S.|
|For employees choosing the detailed method, simplified forms T2200S and Form T777S are used, for 2020, 2021 and 2022 taxation years.|
The 2021 Economic and Fiscal Update announced that the Home Office Expense Deduction would be extended and enhanced:
|available for 2021 and 2022 tax years|
|flat rate amount maximum increased to $500 per individual per year|
Canada Revenue Agency:
Calculate your expenses - calculator to assist with the calculation of eligible home office expenses.
In the October 26, 2020 CPA Canada - CRA webinar on CEWS and more, the issues of home office expenses, commuting, parking, and home office equipment are discussed, starting at 29:40 of the webinar. Some of the points made:
|Commuting/home office expenses:
See also Working From Home Travel Expenses. Travel to your employer's place of business may be deductible if not reimbursed by a tax-free vehicle allowance.
In order for expenses not reimbursed by the employer to be deductible, the work space must be either:
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 (depreciation) may not be deducted.
Some employers may choose to reimburse their employees’ internet or cell phone costs. The CRA’s existing policies maintain that the portion used for employment purposes would not result in a taxable benefit in some circumstances - see T4130
A few points:
|This affects business deductions, employee taxable benefits and employment expenses.|
|It's very important to have business and personal cell phone usage (voice & data) documented in order to have it accepted by CRA, somewhat like a mileage log/trip log for business and personal vehicle usage.|
|There are impacts on GST/HST input tax credits from cell phone usage and home internet access costs.|
See below for more information on CRA's review of the home expenses of Jamie Golombek, CPA, CA, CFP, CLU, TEP.
Sales commission employees eligible to deduct work-space-in-home expenses may also deduct a reasonable portion of property taxes and home insurance, and reasonable monthly home internet access fees. See CRA's Guide T4044 Chapter 2 - Employees earning commission income.
In CRA's Guide T4044 under the heading of Chapter 3 - Employees earning a salary - Supplies (Computers, cell phones, and other equipment), previously indicated that "You cannot deduct the monthly access fees for home Internet service." This was revised on January 29, 2021, for 2020 and later years, with a NOTE indicating You can include your reasonable monthly home internet access fees as part of your work-space-in-the-home expenses.
To find anything in the guide or on any web page or in any document, just do ctrl-f (find) and type the word or phrase you want to find.
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.
See What you need to know if the CRA reviews your home office expense claims, reflecting the personal experience of Jamie Golombek, CPA, CA, CFP, CLU, TEP.
See his follow-up article Everything you need to know about claiming home office expenses on your tax return, which he wrote after CRA rejected his claim for employment expenses incurred while working from home (WFH) due to the pandemic.
See above for how to claim your working from home expenses during the pandemic.
Tax Tip: Keep awesome documentation of your expenses if you're claiming the detailed method!
Line 22900 employment expenses can be entered in the "other deductions" line of the Canadian Tax and RRSP Savings Calculator.
- on this topic, the above information still applies, and see also the Video Tax News links below.
Revised: April 12, 2022
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