Home Office Expenses
Due to COVID-19, CRA has announced some enhanced home office claims that can be made for your 2020 tax return. Below outlines two methods on how you can claim your home office and working from home expenses:
Flat Rate Method
CRA has decided to do a temporary flat rate method to claim home office related costs.
A person is eligible for this if:
You worked from home due to COVID-19 (if you are not required to work from home but your employer gave you the option to work from home, CRA considers this condition to be satisfied);
You worked from home more than 50% of the time for at least 4 consecutive weeks in 2020 due to COVID-19;
You are only claiming home office expenses and no other employment expenses (i.e. such as automobile costs).
If you meet the above conditions you can claim $2/day for each work day you worked from home in 2020 (exclude vacation, sick days etc.) without any receipts for up to 200 work days.
So, for example, if you worked at home for 100 days you could deduct $200 off on your personal tax return and this would save you in the range of 60-100 of tax depending on your income level so not huge amount but you may as well save money from the tax man if you can!
If you choose to use the detailed method, the CRA has created a new short form version T2200S which needs to be signed by the employer.
In this scenario, you would need to track all your actual home expenses and pro rate to the square footage of your home office or number of rooms in the home relative to your office. Non-commissioned employees can deduct consumables including cleaning materials, maintenance, rent, electricity and heating costs. Commissioned employees can also claim property taxes and home insurance. CRA has clarified that a portion of monthly internet fees are claimable as part of home office expenses as well.
Again, in all cases these costs are pro rated and receipts should be kept to back up your claim. In some cases the detailed method would generate a bigger deduction but is a bit more work.
Need assistance or have a tax related question? Click here and contact a member of our Tax division.
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