The update includes:
- New temporary flat rate method
- New options to claim the actual amounts you paid
- New eligible expenses
New Temporary Flat Rate Method
The new temporary flat rate method simplifies your claim for home office expenses. You are eligible to use this new method if you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020 due to the COVID-19 pandemic. You can claim $2 for each day you worked from home during that period plus any additional days you worked at home in 2020 due to the COVID-19 pandemic. The maximum you can claim using the new temporary flat rate method is $400 (200 working days) per individual.
Eligibility
Each individual working from home who meets the eligibility criteria can use the temporary flat rate method to calculate their deduction for home office expenses. This means multiple people working from the same home can each make a claim.
This method can only be used for the 2020 tax year.
New Detailed Method
You are eligible to claim a deduction for home office expenses for the period you worked from home, if you meet all of the criteria:
- You worked from home in 2020 due to the COVID-19 pandemic or your employer required you to work from home;
- You worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020;
- Have a completed and signed Form T2200S or Form T2200 from your employer; and
- The expenses are used directly in your work during the period
Changes to the process
The CRA:
- Created a simplified Form T2200S and Form T777S;
- Created a calculator to help you claim the home office expense deduction that you are entitled to; and
- Will accept an electronic signature on the Form T2200S and Form T2200 to reduce the necessity for employees and employers to meet in person (applies to the 2020 tax year only)
New Eligible Expenses
The CRA has released a 59 item list of items that individuals may have been considering deducting, which indicates what specifically would be deductible, and what would not. The eligibility list is broken down by deductibility for commissioned sales persons and employees.
Government Links
Backgrounder – Simplifying the process for claiming a deduction for home office expenses
Backgrounder – Employer-provided Benefits and Allowances: CRA and COVID-19
Backgrounder – Consultation on the simplification of Form T2200
Home office expenses for employees
Frequently asked questions – Home office expenses for employees
Should you have any questions or feedback, please reach out to myself or the team. As always, we are here to help and support you.
Caveat: The information in this publication is current as of the time it was written. This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Deuzeman & Associates to discuss these matters in the context of your particular circumstances. Deuzeman & Associates does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.
