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Employees may be able to deduct work-space-in-home expenses if all the
following criteria are met:
One of the following applies:
Your employer required you to work from home (written or verbal
agreement). For 2023, the employee will be considered to satisfy this
criteria if they have voluntarily entered into a formal telework
agreement with their employer,
You worked from home in 2020, 2021 or 2022 due to the COVID-19
pandemic - this only applies for home office expenses for those years.
You were required to pay for expenses related to the work space in your
home, but no deduction is allowed for expenses reimbursed by your employer.
One of the following applies
Your work space is where you mainly (more than 50% of the time) work
for a period of at least 4 consecutive weeks in the year. If you have
more than 1 eligible period during the year, you can claim your expenses
for each period.
You only use your work space to earn employment income, AND you
use it regularly and continually for in-person meetings with
clients, customers, or other people while doing your work.
Your expenses are used directly in your work.
One of the following applies:
You have a completed and signed copy of Form T2200, Declaration of
Conditions of Employment, from your employer,
You have a completed and signed copy of Form T2200S, Declaration of
Conditions of Employment for Working at Home Due to COVID-19, from your
Declaration of Conditions of Employment need not be submitted with the tax
return, but must be retained and provided if so requested by CRA. These expenses are
detailed and summarized on Form
T777 and entered as a deduction from income on
line 22900 (other employment expenses) of the personal income tax return. The
employee will only be able to deduct the expenses that the employer required
them to pay, and not all expenses will be deductible.
For 2023, eligible employees who worked from home must use the detailed
method for calculating home office expenses - the temporary flat rate method no
longer applies. See CRA's Home
office expenses for employees.
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
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.
Cell phone costs, as well as office supplies, are not considered work
space in home expenses, and are claimed on a different section of Form
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
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
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.
Fall Economic Statement announced that the Home Office Expense Deduction
would be simplified due to millions of Canadians unexpectedly working from home
because of COVID-19. Those employees who worked from home prior to the
pandemic would continue to claim home office expenses in the same manner as
before the pandemic, using the detailed method.
Employees with larger claims for home office expenses can still choose to
use the existing detailed method to calculate their home office expenses
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
T777S are used, for 2020, 2021 and 2022 taxation years.
CPA Canada / CRA Webinar Re Home Office Expenses During COVID
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:
Although parking, and travel between the employee's home and place of
employment are usually a taxable benefit, a reasonable allowance for
additional commuting costs incurred by the employee while the employee
continues to work at the employer's place of business, or while working
from home, will not be considered a taxable benefit during the pandemic.
In situations where the employee continues working at their regular
place of employment, CRA will not consider the employee to receive a
taxable benefit where their employer pays for, reimburses, or provides a
reasonable allowance for additional commuting costs incurred by the
This position is extended to situations where the employee is working
from home because the regular place of employment is closed, and CRA
would not consider the employee to receive a taxable benefit where the
employer pays for, reimburses or provides a reasonable allowance for
commuting costs incurred by the employee to travel to the regular place
of employment, say to pick up computer equipment or perhaps other office
equipment so that they can work from home.
Both the above positions would be extended to the use of
employer-provided motor vehicles for this kind of travel.
Employers should maintain appropriate records to demonstrate that
allowances provided are reasonable in relation to commuting costs.
Employees using employer-provided vehicles need to keep records of
kilometres driven when commuting between their home and the regular
place of employment.
Parking: When the regular place of employment is closed due to COVID-19, the CRA will not consider that an employer-provided parking spot at the place of employment available to an employee’s use would result in a taxable benefit.
Home office equipment: CRA will not consider an employee to receive a taxable benefit where the employer pays or reimburses up to $500 for computer or home office equipment to enable the employee to carry out their duties. They would expect that the employee would have receipts that they’ve provided to their employer. Equipment could include chairs, desks, monitors and some computer equipment. If the employer pays or reimburses over $500,
the excess must be included in the employee’s income as a taxable benefit – unless ownership is retained by the employer.