There is good news for those of us working from home, due to the pandemic and under new CRA guidelines we will be able to choose between using a new temporary flat rate (only for 2020) or using the detailed method to claim expenses. This will simplify the process for both employers and employees and will reduce the compliance burden for employers who usually provide T2200 forms to their employees. However these new rules only apply to employees, nothing has changed for those who are self employed working at home. Here are some of the highlights:
Eligibility - to claim this temporary flat rate you must meet all the following conditions:
How it works: You can claim $2 for each day you worked from home during the four consecutive weeks mentioned above, plus any additional days you worked at home in 2020 because of the pandemic. The maximum you can claim is $400.
Why it is simpler: You don't need to calculate the size of your workspace, keep receipts or ask your employer to complete and sign Form T2200 or Form T2200S a shorter version that can be used if you opt for the detailed method calculate your home office expenses.
How to make the claim: First count the number of days you worked from home in 2020 due to the pandemic including part days and multiply that by $2 per day up to a maximum of $400. You will then use form T777S - Statement of Employment Expenses for Working at Home Due to COVID-19 to enter these amounts and attach it to your 2020 income tax return.
The detailed method to claim expenses is much more complicated.
Should you choose the flat rate or the detailed method? - this will depend on your own personal circumstances. It might make sense to go for the detailed method if you rent your home because included in your rent are expenses such as insurance and property taxes which you cannot claim if you own your own home. For homeowners your eligible expenses may only be utilities so the fixed method may provide a deductions similar to that under the detailed method.
The CRA website or income tax preparer will be able to provide you with more information to help you to decide which method you should use to claim your workspace expenses.
From an article by Margaret Craig-Bourdin
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