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Did You Work from Home in 2010 Due to COVID-19?

For the 2020 personal tax year, Canada Revenue Agency (CRA) has created two new policies to go along with the existing Detailed Method of claiming home office expenses by an employee. These new policies make it easier for employees who were required to work from home due to COVID-19 in 2020 to claim a deduction for home office expenses on their 2020 personal tax returns.

The three different methods available to claim home office expenses for 2020 are as follows:

  • Temporary Flat Rate Method
  • Simplified Detailed Method – T2200S (Only Working from Home Expenses)
  • Detailed Method – T2200 (Same as Prior Years)

Temporary Flat Rate Method (TFR Method)

This policy allows eligible employees that worked from home in 2020 due to COVID-19 to claim $2/day up to a max of 200 days ($400 per individual).

Eligibility and Reporting for TFR Method

  • The employee worked from home in 2020 due to COVID-19;
  • The employee worked more than 50% of the time from home for a period of at least 4 consecutive weeks in 2020;
  • Can only claim TFR method if not claiming other employment expenses (i.e. Detailed Method or Simplified Detailed Method);
  • Cannot claim TFR method if employer reimbursed all of the employee’s home office expenses, however, can claim if only some of the expenses were reimbursed;
  • No employer certification required;
  • No receipts required to claim;
  • The New T777S will need to be completed on your personal tax return.

For a useful tool for calculating the number of business days in a period, visit https://www.timeanddate.com/date/workdays.html

Simplified Detailed Method – Only Working from Home Expenses

This policy allows eligible employees that worked form home due to COVID-19 in 2020 to claim a portion of their allowable home office expenses.

Eligibility and Reporting for Simplified Detailed Method – Home Office Expenses Only

  • The employee worked from home in 2020 due to COVID-19;
  • The employee was required to pay for expenses related to their home office work space;
  • The employee worked more than 50% of the time from home for a period of at least 4 consecutive weeks;
  • The employee has obtained a completed and signed T2200S form from their employer (or, as in the past a T2200 Form certifying they were required to work from home);
  • Receipts for all home office expenses claimed are required to be kept;
  • The New T777S will need to be completed on your personal tax return.

The CRA provides additional guidance on what home expenses may be eligible to be claimed on their official webpage.

Detailed Method

This policy from CRA has not changed from the past. This policy applies to employees required to work from home in 2020 and are claiming expenses other than home office (ie. Small tools, mileage, etc.).

Eligibility and Reporting for Detailed Method

  • The employee was required by contract to work from (i.e. not necessarily due to COVID-19);
  • The employee must be required to work from home more than 50% of the time, or they must use their home office workspace exclusively to earn employment income and on a regular and ongoing basis for meeting clients or customers;
  • The employee was required to pay for expenses related to their home office work space;
  • Receipts for all home office expenses claimed are required to be kept;
  • The employee has obtained a completed and signed T2200 Form from their employer;
  • The employee may be able to claim certain other employment expenses incurred (not just home office) if this is indicated on the T2200 form signed by their employer;
  • The T777 will need to be completed on your personal tax return.

Other Considerations

The CRA has acknowledged that they will accept electronic signatures on Form T2200S and Form T2200 for the 2020 year.

For help in determining what information you need to claim a home office expense deduction on your 2020 T1, visit our website for a copy of our GH&A T1 Client Checklist, which includes our new  Home Office Expense Checklist.

If you have questions about Home Office Expenses and deductibility, contact Gregory, Harriman & Associates LLP by email at This email address is being protected from spambots. You need JavaScript enabled to view it. or by phone at 1-403-934-3176.

Disclaimer

The information in this publication is current as of March 3, 2021.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Gregory, Harriman & Associates LLP to discuss these matters in the context of your particular circumstances. Gregory, Harriman & Associates LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.