Working From Home: Your Tax Return Made Easy

Last year, many Canadians unexpectedly had to work from home which resulted in millions of pop-up work spaces in their kitchens, bedrooms and living rooms. In response, the Canada Revenue Agency (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.

Here’s what you need to know about claiming home office expenses this tax season.

News release courtesy of Canada Revenue Agency.

The past year has been filled with unprecedented challenges due to the COVID-19 pandemic. 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 launched today simplified forms (Form T2200S and Form T777S) and a calculator designed specifically to assist with the calculation of eligible home office expenses.

For more information on working from home expenses go to Canada.ca/cra-home-workspace-expenses.

Quick facts

• Home office expenses can be claimed as a deduction on an employee’s personal income tax return. Deductions reduce the amount of income they pay tax on.

• For those using the detailed method to calculate their home office expenses, the CRA has expanded the list of eligible expenses that can be claimed to include home internet access fees. A comprehensive list of all eligible expenses is available online.

• According to Statistics Canada, “Working from home continues to be an important adaptation to COVID-19 health risks, with 2.4 million Canadians who do not normally work from home doing so in October.”

• The CRA engaged many stakeholders in the fall of 2020 about the simplified Form T2200 and work-space-in-the-home expenses prior to introducing these temporary measures. For more information, go to the Backgrounder – Consultation on the simplification of Form T2200.

• The new temporary flat rate method to calculate the deduction for home office expenses was announced on November 30th in the Fall Economic Statement.

Associated 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

• Form T2200S Declaration of Conditions of Employment for Working at Home During COVID-19 

• Form T777S – Statement of Employment Expenses for Working at Home Due to COVID-19

• Infographic: Working from home?

Want to know what this means for you as you consider buying or selling a home? We’re here to make your experience stress-free.

Call us today at 1.888.918.6570, send us an email or book an appointment.

There’s absolutely NO OBLIGATION. Consultations with our team of experts are FREE.

While the information contained in this site has been presented with all due care, Faris Team assumes no responsibility or liability for any errors or omissions.