New temporary (only for 2020) simplified flat rate method:
1. Employee doesn’t need to provide backup receipts or calculate the size of the work space
2. No need to obtain a signed form from an employer
3. Expense amount that can claim as employment expense is $2 per day worked from home to a maximum of 200 days ($400.00). This means that if there are about 21-22 working days in a month, an employee had to work nearly 10 months from home to get the maximum deductible amount.
4. Full-time or part-time working days count towards the deduction. Days off, vacation days, sick days or leaves of absence, do not count.
Detailed method – new twist:
Sometimes, the deduction is larger when claim actual expenses incurred. To be eligible ALL the below criteria need to be met:
1. Worked from home in 2020 due to COVID or the employer required the employee to work from home.
2. Worked from home more than 50% of the time for at least 4 CONSECUTIVE weeks.
3. Employer provided a signed “declaration of conditions of employment form” (link to the form below)
4. Important – can only deduct expenses that are used DIRECTLY to work from home. Here is CRA’s summary of eligible vs. non eligible expenses.
|Eligible Expenses||Non-eligible Expenses|
|rent paid||Capital cost allowance|
|Electricity, water, heat or utilities portion of condo fees||mortgage interest|
|Maintenance and minor repairs (light bulbs, paint, cleaning supplies)||mortgage principle payments|
|Home internet access fees||capital home maintenance expenses - replacing windows, flooring, furnace etc|
|Office supplies (pens, folders, toner, ink, sticky notes etc.)||office equipment (calculator, laptop case, printer etc)|
|Employment use of basic cell phone||basic rate for landline|
|Long distance calls for employment purposes||cell phone connection or license fee|
|Employees who earn commission income can also claim:||Purchase of laptop, cell phone, computer, tablet etc.|
|property taxes||Computer accessories|
|home insurance||Electronics: speakers, voice assistant, television etc.|
|computer, tablet, laptop, fax machine that reasonably relate to earning commission income||Furniture|
CRA added a convenient calculator to estimate the deduction. Here is a link: Calculate your expenses - Home office expenses for employees - Canada.ca
To be signed by an employer: T2200S – Declaration of Conditions of Employment for working from home due to COVID: T2200S Declaration of Conditions of Employment for Working at Home Due to COVID-19 - Canada.ca
To be completed by a tax preparer and submitted with the tax return: T777S – Statement of Employment Expenses for Working at Home due to COVID: T777S Statement of Employment Expenses for Working at Home Due to COVID-19 - Canada.ca