Employee tax deductions for working from home during 2020

In light of the huge spike in remote working in 2020, the federal government has introduced a streamlined option for how employees can claim home office expenses. 

Employees required to work from home due to the pandemic can elect to claim their home office expenses — which are things like internet, a portion of their rent and utilities — using a simple flat-rate method, or a detailed method. Here is the government’s page comparing the two. 

The temporary flat-rate method 

Employees using this method to make a claim must have been required to work from home due to COVID-19. They must also have worked from home more than 50% of the time for a period of at least four consecutive weeks in 2020. This is the low paperwork choice. Employers are not required to complete the usual home office expense Form T2200 and employees are not required to keep documentation to support their work from home expense claim. Using this method, employees can claim $2.00 per day for each day they worked from home in 2020 due to the COVID-19 pandemic, up to a maximum of $400. This is 200 days working from home. The time period from March 17, 2020, to December 31, 2020, includes 201 working days. 

The requirement to work from home does not have to be part of the employee employment contract in order for them to claim expenses using this option. Employees cannot claim expenses for which their employer reimbursed them. 

The detailed method

Employees can elect to use the detailed method if they worked from home in 2020 due to the pandemic or if their employer required them to work from home. Employees must have incurred work from home expenses for which they were not reimbursed. To use this method the employee must also have used space in their home for work more than 50% of the time for at least four consecutive weeks. Employees who elect to use this method must have their employers fill out a T2200S or T2200 and must keep records of their expenses. 

A T2200S is a shorter version of the regular T2200 to be used when work from home was COVID-19 specific.

Takeaways

Employers should be prepared to fill out T2200S for employees who elect to use the detailed method to claim expenses on their taxes. When employers have provided employees with home office allowances to cover costs like internet employees may not be eligible for these claims as they may not have actually incurred costs related to working from home. 

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Spring Law

Employment and Labour Law Firm at SpringLaw

SpringLaw is a virtual Canadian boutique law firm, practicing exclusively in the areas of employment, labour and human rights law.We work with a wide range of employers - from global companies with operations in Canada, to local owner-operators and start-ups - advising on the wide range of legal issues that arise out of the workplace, particularly workplaces in the tech and creative space. We also provide legal and strategic advice to employees throughout their employment journey. Blog posts are written by Marnie Baizley, Jessyca Greenwood, Deidre Khayamian, Danielle Murray, Hilary Page and Lisa Stam.

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