P&P Accounting One stop for all your accounting needs.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 calculator:
CRA added a convenient calculator to estimate the deduction. Here is a link: Calculate your expenses - Home office expenses for employees - Canada.ca
Forms:
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