Work From Home Tax Break

As we approach the end of 2020, we take stock of what has happened throughout the year. There is no doubt that this year was unlike any other, as the global pandemic caused by COVID-19 at the beginning of the year in Canada re-shaped how we live. The pandemic changed many aspects of our lives, including who we can physically see, how we work and behave in the public and even where we can eat. 

We saw a record number (40% of all workers according to Statistics Canada) of people move back their work-life to home-life. To help alleviate the cost associated with this move, Canada Revenue Agency recently introduced a new tax deduction associated with their home office expense.

There are two methods of claiming this tax deduction:

1. Simplified Temporary Flat Rate Method

   1. This is new for the year and most simple

   2. There is no need to provide receipt or get anything signed by your employer

   3. Best for: those who have modest expenses and don’t want to deal with the hassle of detailed method

   4. Eligibility: Employees who worked from home more than 50% of the time over the period of at least 4 weeks in a row because of COVID-19

   5. Amount: $2/day up to a maximum of $400

2. Detailed Method

   1. Existed pre-pandemic, but has been streamlined this year

   2. Employees are required to provide receipt, and must provide T2200 or T2200S form which are filled out by the employer

   3. Best for: those who have large expenses and have kept track of their home office related spending

   4. Eligibility: Employees who have worked from home who meet various criteria including length of your at-home work

   5. Amount: eligible expenses which must be accompanied by supporting documents and employer verification (form T2200 or T220S)

      1. Eligible: rent, utilities, home internet expenses, office supplies (stationery item, pen, folder)

      2. Ineligible: capital cost allowance, mortgage interest, office equipment (printer, fax machine, calculator), cell phone connection fee