Claiming a deduction for home office expenses – What you need to know
December 26, 2020
Since the beginning of the COVID-19 pandemic in mid-March 2020, public health officials have asked Canadians to stay at home to help minimize the spread of the virus. As a result, an unprecedented number of employees who would normally work in an office environment are now working from home.
In response, Canada Revenue Agency (CRA) has made the home office expenses deduction available to more Canadians, and simplified the way employees can claim these expenses on their personal income tax return for the 2020 tax year.
Employees who worked from home more than 50% of the time over a period of a least four consecutive weeks in 2020 due to COVID-19 will now be eligible to claim the home office expenses deduction for 2020. The use of a shorter qualifying period will ensure that more employees can claim the deduction than would otherwise have been possible under longstanding practice.
A 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. Under this new method, employees will not have to get Form T2200 or Form T2200S completed and signed by their employer.
Employees with larger claims for home office expenses can still choose to use the detailed method to calculate their home office expenses deduction. To simplify the process for employees choosing this method, the CRA has created simplified forms (Form T2200S and Form T777S), and has introduced a calculator designed specifically to assist with the calculation of eligible home office expenses.
Normally, many Canadians look to their Member of Parliament for help with filing returns and getting the benefits, credits and deductions to which they are entitled. We have attached a fact sheet to inform you about the new temporary flat rate method. Feel free to use it as needed to make sure constituents have what they need to claim their expenses and understand the tax-filing process.
- News release – Introducing a simplified process for claiming the home office expenses for Canadians working from home due to the COVID-19 pandemic
- Backgrounder – Simplifying the process for claiming a deduction for home office expenses
- Backgrounder – Employer-provided benefits and allowances: CRA and COVID-19
- Backgrounder – Consultation on the simplification of Form T2200
- Home office expenses for employees
- Frequently asked questions – Home office expenses for employees
- Form T2200S Declaration of Conditions of Employment for Working at Home During COVID-19
- Form T777S - Statement of Employment Expenses for Working at Home Due to COVID-19