Can I As A Salaried Employee Claim A Home Office Deduction?

By Randall Orser | Personal Income Tax

Tax deduction piggy TNMany employers are making use of telecommuting employees, and you may be one of those. It can be quite handy to work from home, even a couple of days a week. For a home-based business owner, the home office deduction can be a great deduction for writing off the use of the home to run the business. Can a salaried employee do the same?

You can deduct expenses you paid in 2013 for the employment use of a workspace in your home, as long as you meet one of the following conditions:

  • The workspace is where you mainly (more than 50% of the time) do your work.
  • You use the workspace only to earn your employment income. You also have to use it on a regular and continuous basis for meeting clients or customers.

You can deduct the part of your costs that relates to your workspace, such as the cost of electricity, heating, and maintenance. If your office space is in a rented house or apartment where you live, deduct the percentage of the rent as well as any maintenance costs you paid that relates to the workspace. However, you cannot deduct mortgage interest, property taxes, home insurance, or capital cost allowance.

If you are salaried and commission based, and your commissions are greater than your salary (I would say double may be best), you may be able to deduct insurance and property taxes.

You can only deduct workspace expenses from the income to which the expenses relate and not from any other income. The amount you can deduct for work-space-in-the-home expenses is limited to the amount of employment income remaining after all other employment expenses have been deducted. This means that you cannot use workspace expenses to create or increase a loss from employment.

If you cannot deduct all your workspace expenses in the year, you can carry forward the expenses. You can deduct these expenses in the following year as long as you are reporting income from the same employer. However, you cannot create or increase a loss from employment by carrying forward workspace expenses.

You must get your employer to complete and sign a form T2200 Declaration of Conditions of Employment, and keep a copy for your records. You do not have to send this into Canada Revenue Agency.

If you are a salaried employee you can deduct work from home expenses, though you are limited compared to someone who runs a business out of their home.

About the Author

Bookkeeper Extraordinaire Number Crunchers® Financial Services Learn how to just say stuff it to this bookkeeping thing with our 'Just Say: "Stuff It" To Bookkeeping program.