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Home -> Personal Tax -> Filing Your Return -> Employment Expenses -> Employee work space in home expensesEmployee Work-Space-in-Home ExpensesIncome Tax Act s. 8(13)Who Can Deduct Work- Space-In-Home Expenses? Deductible Working From Home Expenses Working From Home Travel Expenses Salaried Employees - Home Internet Fees T777 Statement of Employment Expenses Calculators for Working From Home Expenses GST/HST on Work-Space-In-Home Expenses CRA Reviews and Reassessments of WFH Expenses Canadian Tax and RRSP Savings Calculator Canada Revenue Agency (CRA) Resources Home Office Expenses 2021 and 2022 Working From Home re COVID-19 - 2020 to 2022 Only CPA Canada / CRA Webinar Re Home Office Expenses During COVID Other Resources Re COVID-19 Working from Home Who Can Deduct Work- Space-In-Home Expenses?Employees may be able to deduct work-space-in-home expenses if all the following criteria are met:
Form T2200 Declaration of Conditions of Employment need not be submitted with the tax return, but must be retained and provided if so requested by CRA. These expenses are detailed and summarized on Form T777 and entered as a deduction from income on line 22900 (other employment expenses) of the personal income tax return. The employee will only be able to deduct the expenses that the employer required them to pay, and not all expenses will be deductible. For 2023, eligible employees who worked from home must use the detailed method for calculating home office expenses - the temporary flat rate method no longer applies. See CRA's Home office expenses for employees. These expenses can be entered as "other expenses" in the Detailed Canadian Tax and RRSP Savings Calculator. Deductible Working From Home ExpensesIn order for expenses not reimbursed by the employer to be deductible, the above criteria must be met. Allowed expenses include heat, electricity, light bulbs, cleaning materials, maintenance, etc. If the home is rented, a reasonable portion of the rent may be deducted. Mortgage interest and capital cost allowance (depreciation) may not be deducted. See Expenses you can claim from CRA, which lists many types of expenses and whether they can or cannot be claimed. Working From Home Travel ExpensesTravel to your employer's place of business may be deductible if not reimbursed by a tax-free vehicle allowance. See Working From Home Travel Expenses. Internet and Cell Phone UseSome employers may choose to reimburse their employees’ internet or cell phone costs. The CRA’s existing policies maintain that the portion used for employment purposes would not result in a taxable benefit in some circumstances - see T4130 A few points:
See below for more information on CRA's review of the home expenses of Jamie Golombek, F CPA, F CA, CFP, CLU, TEP. Sales Commission EmployeesSales commission employees eligible to deduct work-space-in-home expenses may also deduct a reasonable portion of property taxes and home insurance, and reasonable monthly home internet access fees. See CRA's Guide T4044 Chapter 2 - Employees earning commission income. Salaried Employees - Home Internet FeesIn CRA's Guide T4044 under the heading of Chapter 3 - Employees earning a salary - Supplies (Computers, cell phones, and other equipment), previously indicated that "You cannot deduct the monthly access fees for home Internet service." This was revised on January 29, 2021, for 2020 and later years, with a NOTE indicating You can include your reasonable monthly home internet access fees as part of your work-space-in-the-home expenses. To find anything in the guide or on any web page or in any document, just do ctrl-f (find) and type the word or phrase you want to find. T777 Statement of Employment ExpensesCRA form T777, Statement of Employment Expenses, is used to list all employment expenses, and to calculate the amount of allowable motor vehicle expenses and work-space-in-home expenses. The work-space-in-home expenses can only be used to reduce employment income. They cannot be used to create or increase a loss from employment income. Any expenses in excess of the employment income can be carried forward to be used in the next tax year. Calculators for Working From Home ExpensesCanada Revenue Agency: Calculate your expenses - calculator to assist with the calculation of eligible home office expenses. Revenue Quebec: Choose the method of calculating teleworking expenses that is the most advantageous for you - the Fixed Rate Method is not applicable for 2023 and later years. Teleworking Expenses Tool - only the Detailed Method is applicable for 2023 and later years. GST/HST on Work-Space-In-Home ExpensesThe work-space-in-home expenses will include any GST/HST or provincial sales taxes incurred. You may be eligible for a refund of the GST/HST included in the costs. See Employee and Partner GST/HST rebate on the GST/HST page. CRA Reviews and Reassessments of WFH ExpensesSee What you need to know if the CRA reviews your home office expense claims, reflecting the personal experience of Jamie Golombek, F CPA, F CA, CFP, CLU, TEP. See his follow-up article Everything you need to know about claiming home office expenses on your tax return, which he wrote after CRA rejected his claim for employment expenses incurred while working from home (WFH) due to the pandemic. And the final article Want to take on the CRA? Jamie Golombek shares his own fight with the taxman, which details Jamie Golombek's attempt to have his day in Tax Court, which was not needed as CRA quickly settled after he filed his appeal. See above for how to claim your working from home expenses during the pandemic. Tax Tip: Keep awesome documentation of your expenses if you're claiming the detailed method! Canadian Tax and RRSP Savings CalculatorLine 22900 employment expenses can be entered in the "other deductions" line of the Canadian Tax and RRSP Savings Calculator. Canada Revenue Agency (CRA) ResourcesHome office expenses for employeesLine 22900 Other Employment Expenses T2200 Declaration of Conditions of Employment T4044 Employment Expenses - including Employees working at home due to COVID-19 IT-352 Employee's Expenses, including work-space-in-home expenses (Archived) T4130 Employers' Guide - Taxable Benefits and Allowances Home Office Expenses 2021 and 2022The 2021 Economic and Fiscal Update announced that the Home Office Expense Deduction would be extended and enhanced:
See CPA Canada's Employee home office expenses for 2021: Government extends temporary rules. Working From Home re COVID-19 - 2020 to 2022 OnlyThe 2020 Fall Economic Statement announced that the Home Office Expense Deduction would be simplified due to millions of Canadians unexpectedly working from home because of COVID-19. Those employees who worked from home prior to the pandemic would continue to claim home office expenses in the same manner as before the pandemic, using the detailed method. On December 15, 2020, CRA announced a simplified process:
CPA Canada / CRA Webinar Re Home Office Expenses During COVIDIn the October 26, 2020 CPA Canada - CRA webinar on CEWS and more, the issues of home office expenses, commuting, parking, and home office equipment are discussed, starting at 29:40 of the webinar. Some of the points made:
Other Resources Re COVID-19 Working from HomeDecember 2020 Life in the Tax Lane Video Tax News December 15, 2020 - New Home Office Expense Claim Methods BLG - CRA consults stakeholders on employee work-from-home expense deduction - includes CRA's proposed revised "short-form" T2200. EY Canada - Could home quarantine mean home office tax deductions? - on this topic, the above information still applies, and see also the Video Tax News links below. LawNow: Working from Home: Income Tax Issues Video Tax News June 2020 Life in the Tax Lane - Telecommuting Allowances and Reimbursements Video Tax News May 2020 Life in the Tax Lane - Working From Home
Revised: September 20, 2024
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