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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 22900 (line 229 prior to 2019) of the personal income tax return.
In order for any expenses to be deductible, the work space must be either:
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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.
In CRA's Guide T4044 under the heading of Supplies (Computers, cell phones, and other equipment), it indicates that "You cannot deduct the monthly access fees for home Internet service." To find anything in the guide or on any web page or in any document, just do ctrl-f and type the word 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.
Line 22900 employment expenses can be entered in the "other deductions" line of the Canadian Tax and RRSP Savings Calculator.
Other Resources - Re COVID-19 Working from Home
New re COVID-19 and work-space-in-the-home deduction: BLG - CRA consults stakeholders on employee work-from-home expense deduction - includes CRA's proposed revised "short-form" T2200.
EY Canada - Could home quarantine mean home office tax deductions?
- on this topic, the above information still applies, and see also the Video Tax News links below.
LawNow: Working from Home: Income Tax Issues
Video Tax News May 2020 - Working From Home
Video Tax News June 2020 - Telecommuting Allowances and Reimbursements
Canada Revenue Agency (CRA) Resources
Line 22900 (line 229 prior to 2019) Other Employment ExpensesIT-352 Employee's Expenses, including work-space-in-home expenses (Archived)
Revised: September 15, 2020