In 2020 the Department of Finance introduced several additional tax measures for individuals and businesses in order to address the fact that as a result of COVID-19, a significant portion of Canada’s workforce had begun working from home on a regular basis, and employees are starting to bear some of the additional costs associated with maintaining a workplace in their home.
For 2021, the government has confirmed that some of these measures will continue for the 2021 taxation year, and in some cases for the 2022 taxation year as well. Here is an update on what can be claimed for home office expenses:
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Temporary Flat Rate Method for Work-Space-In-Home – In 2020 the Department of Finance introduced a temporary “Flat Rate Method” for employees who worked from home more than 50% of the time during any period in 2020. Eligible employees were able to claim $2 for each day worked from home during that period plus any additional days you worked at home in 2020 due to the COVID-19 pandemic. The maximum you could claim for 2020 using the new temporary flat rate method is $400 (200 working days) per individual. In its fall Economic and Fiscal Update 2021, released December 14, 2021, the Department of Finance confirmed that the Temporary Flat Rate Method would be extended to the 2021 and 2022 taxation years and that the maximum deduction would be increased to $500.
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T777S Simplified Form for Detailed Home Office Expenses – For employees wishing to claim a deduction for home office expenses based on actual expenses incurred, the Department of Finance introduced a simplified version of the T777 form (T777S) which employees that were required to work from home due to COVID-19 could complete in order to claim these amounts. The T777S form is effectively a streamlined version of the detailed T777 form and must be accompanied by a simplified T2200S form which acted as a streamlined version of the previously available T2200 form for employer certification of the employee’s eligibility to claim these expenses. This simplified method made it much easier for employees claiming only home office expenses to make these claims on their returns. On January 18, 2022 the CRA released additional information regarding forms T777S and T2200S, including the 2021 versions of these forms, confirming that they will once again be available for 2021.
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In 2020 CRA commented that it would allow employers to provide employees with a one-time non-taxable reimbursement of up to $500 per employee for the purchase of personal computer or office equipment (including office furniture). The payment would be considered a deductible expense to the employer and employees receiving this benefit should be encouraged to retain receipts for the purchase of supplies to support the non-taxable nature of this benefit. The CRA recently released additional information regarding COVID-19 Employer-provided benefits and allowances which confirmed that this position would be extended to December 31, 2022, however, it clarified that the $500 maximum reimbursement would be applied as the maximum amount that can be reimbursed to each employee and is not for each piece of computer or office equipment that an employee may purchase between March 15, 2020 and December 31, 2022 (i.e. if an initial reimbursement of $500 was issued to an employee at some point during 2020, no additional amount will be available to that employee under this position as the maximum reimbursement of $500 has already been reached for the period of March 15, 2020 and December 31, 2022).
For more information on the deductibility of home office expenses, visit the CRA Home office expenses for employees webpage as this webpage contains a detailed walkthrough of the different home office expense deduction methods available.
For questions about home office expenses and other allowable employment expense deductions, 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.