COVID-19 HAS CHANGED THE LANDSCAPE OF ALMOST EVERYTHING FOR CANADIANS – FROM HOW WE INTERACT WITH OUR FRIENDS AND FAMILY, TO HOW AND WHERE WE WORK. AS A RESULT, THE CANADA REVENUE AGENCY (CRA) HAS RELEASED ADDITIONAL DETAILS AND NEW GUIDELINES REGARDING ThE HOME OFFICE EXPENSE DEDUCTIONS.
The 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. Please note that employees with larger claims for home office expenses can still choose to use the existing detailed method to calculate their home office expenses deduction.
Employees who worked from home more than 50% of the time over a period of at 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 may mean that employees can claim a deduction that would otherwise have been difficult under the existing rules.
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, (referred to as the simplified method) employees will not have to get Form T2200 or Form T2200S completed and signed by their employer.
For employees who wish to use the detailed method and complete the Form T2200 and T2200s, the CRA has designed a new calculator specifically to assist with the calculation of eligible home office expenses.
Regardless of which method is used, CRA may request documentation to support a deduction claimed. It will be important to keep receipts, invoices, logs and other information for the detailed method and a log of days worked from home for the simplified method.