Canada Revenue Agency Allows Simplified Tax Claims for Employees Working From Home

Are you working from home and have home office expenses piling up?

On December 15, 2020, CRA introduced further details on home office expenses for employees. The updates include eligibility and conditions for a temporary flat rate method available for 2020, along with changes to the existing ‘detailed method‘ for 2020. These rules are a response to calls for clarity and support with home office expenses in 2020.

Temporary Flat Rate Method – Available for 2020 Only

This new method provides a greatly simplified version of employee home office expense claims for 2020 personal tax filings:

  • Employees may be able to claim $2 per workday worked from home, up to 200 workdays ($400) using the T777S form;
  • Either part-time hours or full-time days worked from home are eligible, but don’t include days off, vacation days, sick leave days, or other leaves of absences;
  • Employees must have worked from home (part-time or full-time) for at least four consecutive weeks and not have been fully reimbursed by their employer for home office expenses;
  • Employees will not be required to calculate their workspace size or keep supporting documents for expenses; and,
  • Employers will not be required to complete and sign Form T2200 (or the new simplified Form T2200S).

Detailed Method

The detailed method for claiming home office expenses has some updates that should help employers and employees:

  • Simplified forms (T2200S and T777S) for employees working remotely due to COVID-19 with only home office expenses as employment expenses;
  • Allowing electronic signatures for the Form T2200S; and,
  • Guiding more complex situations such as shared workspaces and workspaces used for only a portion of the week.

Traditional Method

The regular T2200 and T777 forms will still apply for employees with eligible employment expenses beyond home office expenses. However, the CRA will permit electronic signatures for Form T2200. As a result, this method may still be required for some employees and would not replaceable by the detailed method.

Further information on these changes is available at CRA’s website.

Looking for more COVID-19 resources?

The Fine print of the CEBA
Reporting for the Temporary Wage Subsidy
Claiming a Home Office for Employees