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Working from home? There’s a tax deduction for that

24 Apr 2021

 

(NC) The COVID-19 pandemic means that many of us have been working from home part or all of the time. But did you know that you could be eligible to claim a deduction for home office expenses on your 2020 tax return?

The Canada Revenue Agency (CRA) has introduced an easy way for employees who worked from home because of COVID-19 to claim these expenses, called the new temporary flat-rate method. Eligible employees can claim $2 for each day they worked from home, up to a maximum of $400 for the year.

You can use this method if:

  • You worked more than 50 percent of the time from home for at least four consecutive weeks in 2020 due to the COVID-19 pandemic;
  • You are only claiming home office expenses and not any other employment expenses; and
  • Your employer did not reimburse you for all your home office expenses.

A different option you can use to calculate your deduction if you have a larger claim is the detailed method. For this, you’ll need a completed and signed T2200 form from your employer, and the receipts to support your claim. To make this process easier, the agency has created simplified forms (T2200S and T777S) and an online calculator.

If you’re self-employed, then you’ll need to complete a different form. Fill out the "Calculation of business-use-of-home expenses" section on form T2125, Part 7.

Find more information at canada.ca/taxes.

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