COVID 19 – Work From Home

The Government of Canada recently announced a few changes to the T2200 form (claiming expenses related to employment income) in relation to COVID-19. Below is the announcement.

The Government of Canada is taking targeted action to support Canadians and Canadian businesses, non-profits and charities that continue to face uncertainty and economic challenges because of the COVID-19 pandemic.

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.

Employees who worked from home more than 50% of the time over a period of a 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 will ensure that more employees can claim the deduction than would otherwise have been possible under longstanding practice.

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, employees will not have to get Form T2200 or Form T2200S completed and signed by their employer.

To simplify the process for employees choosing the detailed method, the CRA has launched simplified forms (Form T2200S and Form T777S) and a calculator designed specifically to assist with the calculation of eligible home office expenses.

The CRA has also published a number of resources to assist both employees and employers, including the Home office expenses for employees web pages, Simplifying the process for claiming a deduction for home office expenses for employees working from home due to COVID-19, Employer-provided benefits and allowances: CRA and COVID-19 backgrounders, as well as Frequently asked questions – Home office expenses for employees, and an Infographic: Working from home?.

When we are preparing our clients taxes in 2021 for the 2020 tax year, we will be asking if the employee has had to work from home for more than 50% of the time over a period of at least 4 weeks. CRA will most likely want proof later on so make sure you have the work from home order documented from your employer (email, letter, etc).

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