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The tax deduction allows employees to claim $2 for each day they worked from home, up to $400
Millions of Canadians working from home may qualify for a tax break of up to $400 dollars, according to an announcement from the Canadian Revenue Agnecy (CRA) on December 15.
Employees will be eligible for the tax break if they’ve been working from home more than 50 per cent of the time for at least four consecutive weeks due to COVID-19.
The CRA has created a “simplified” process to claim the deduction for eligible employees. They’ve introduced a temporary flat rate method so employees can claim a $2 deduction for each day they worked from home during that four-week period, along with any other days they’ve worked from home during 2020. Employees can claim up to a maximum of $400.
This method means Canadians will not need to submit Form T2200, which was required under the original rules for employees to fill out and have signed by their employer proving they are expected to work from home as part of the terms of employment.
The CRA has provided new forms, Form T2200S and Form T777S, detailing the hours worked from home and the expenses claimed.
Employees can only claim home office expenses, and the CRA has outlined which work-space-in-the-home expenses qualify for the deduction as well. They’ve provided an online calculator tool to determine those costs, including internet access, maintenance, home insurance and property taxes.
The forms still need to be signed by your employer, though the CRA is allowing electronic signatures for the 2020 year only to avoid in-person contact between employees and employers.
An October Statistics Canada Labour Force Survey found that there were 2.4 million Canadians working from home who normally would not be due to the pandemic.
Another Statistics Canada report from May found that close to 25 per cent of businesses expect that 10 per cent or more of their workforce will continue to work remotely or telework even after the pandemic is over.