Update: Work Space in the Home Expenses
On December 15, 2020, CRA published additional guidance with respect to claims for work space in the home expenses on the upcoming 2020 personal tax return. The guidance outlines details relating to the new temporary flat rate method, new optional detailed method, changes to the claims process, and new eligible expenses.
Temporary Flat Rate Method
The temporary flat rate method allows eligible individuals to claim a simplified expense of $2 per work day (up to $400) on their 2020 personal tax return. Work days include days that you worked full-time or part-time hours from home either due the requirement of your employer or voluntarily if your employer gave the option to work from home due to the pandemic. You must have worked from home more than 50% of the time for at least 4 consecutive weeks during the pandemic to be eligible.
You do not need to calculate the size of your workspace, keep supporting documents, or obtain a signed Form T2200S or Form T2200, from your employer to use this method.
The temporary flat rate method is not available if claims are being made for other employment expenses, such as vehicle expenses, or if your employer reimbursed all of your home office expenses. If your employer reimbursed some but not all home office expenses, you are still eligible to use this method.
Optional Detailed Method
The optional detailed method for home office expenses allows you to claim expenses you paid for the period you worked from home. Eligibility for the detailed method is similar to the flat rate method with the additional requirements that you obtain a completed signed Form T2200S, or Form T2200, from your employer and the expenses claimed are used directly in your work during the period.
The CRA has created a simplified Form T2200S and Form T777S as well as a new web calculator. The CRA has also stated that they will accept electronic signatures on Form T2200S, or Form T2200, for the 2020 tax year only.
The CRA has also published a list of home office expenses for employees and guidance on how to determine your work space use.
If you are expecting to make a claim on your 2020 personal tax return using the detailed method, you should reach out to your employer to ensure you get a signed T2200S. In addition, all supporting invoices should be kept to support the claim under the detailed method. To make a claim on your 2020 tax return, please complete Form T777S summarizing the home office expenses you incurred during the year.
If you would like our assistance in deciding which method is best for you please do not hesitate to contact us!
