The pandemic has brought a lot of changes from how and where we work to how we meet with clients. More than ever before, many businesses allowed employees to work from home where possible.
To compensate employees and assist with complicated calculations for home office expenses, Canada Revenue Agency introduced a new temporary flat rate method for the 2020 tax year.
To qualify for the temporary flat rate method, you must meet all the following criteria:
- Worked from home in 2020 due to the COVID-19 pandemic;
- Worked more than 50% of the time from home for a period of at least four consecutive weeks;
- Be claiming home office expenses only and no other employment expenses; and
- Not have been reimbursed by your employer for all your home office expenses.
Under the temporary flat rate method:
- You do not need to calculate the size of your workspace;
- You do not need to keep supporting documents; and
- Your employer does not need to complete and sign Form T2200S or Form T2200.
You can claim $2 per day for each day you worked from home, up to a maximum of $400 (200 working days). Note that only actual working days should be included; sick and/or vacation days do not qualify.
If your home office expenses are greater than $2/day or you have other employment expenses to deduct, you are still able to claim a portion of your home office expenses using the detailed method. Under this method, you will be required to support the amounts claimed and have a completed Form T2200S or T2200 from your employer.
As the pandemic has continued, CRA has yet to announce whether the temporary flat rate method will be extended for the 2021 tax year.
***This blog is for information only and not to be used as tax advice or planning without first seeking professional advice. Information is subject to change without notice.