During this pandemic, there were more workers telecommuting from home than ever before.  Unlike business owners and self-employed individuals who can deduct a wide range of expenses for earning income, there are limitations as to what expenses employees can claim based on CRA rules.

If you are an employee who had to work from home due to Covid 19, there are 2 options for you to claim your work from home expenses:

1. For 2020 only, the temporary flat rate method
2. The detailed method

Flat rate method

This is the EASY simplified calculation.  No receipts or special forms are required.

You can deduct up to $2 for each day you worked from home up to a maximum of $400.

You are eligible if you work more than 50% of the time from home for at least 4 consecutive weeks in 2020 due to Covid 19.

Detailed method

This approach requires you to track your expenses and receipts.  This method may be the right choice if you paid more than $400 in expenses.

While CRA has simplified the rules, you need to meet these criteria to qualify for the deduction:

• worked from home or required by your employer to work from home in 2020 due to Covid
• required to pay for expenses related to your home workspace and used the expenses directly in your work
• either:
  • worked mainly (more than 50% of the time) in your home workspace for at least 4 consecutive weeks, or
  • only used your work space to earn employment income (ie. regularly meet clients or customers while doing your work)
• received a signed T2200 or T2200S (Declaration of Conditions of Employment for Working at Home Due to Covid 19) form from your employer

What expenses can you deduct?

Home workspace expenses

You can claim expenses for the period you used the space in your home as your workspace based on its size.  For example, your home office space is 100 sq ft and your house is 1,000 sq ft and you worked in that space from May to July 2020, then you can claim 10% of eligible expenses from May to July.

Expenses you can claim:

• electricity, heat, water, home internet access fees, maintenance and minor repairs, and rent.  (If you are a commissioned employee, you can claim additional expenses.)

Expenditures you cannot claim:

• mortgage interest, principal mortgage payments, home internet connection fees, furniture and capital expenses (items that you keep for a while such as replacing windows, flooring, furnace etc.)

Office supplies

In general, you can claim office expenses for items that are used up while doing the work, ie. paper, ink, envelopes.  Anything that you can keep are not deductible such as computer, connecting cables, monitor, mouse, headset etc. 

Which method works best for you depends on factors such as whether you rent or own your home or whether you leased your office equipment.  In some cases, it may be worth your while to invest time in the detailed method.  Give us a call at 647-991-4621 and find out how we can help.