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Work from home expenses, COVID-19 and the T2200

The new normal seems to be sticking around for a lot longer than most people expected, with no end in sight. If you are one of the many who are working from home, may now qualify for a tax benefit to deduct various home-office expenses from your 2020 income tax season.

The T2200 form, available from the CRA here and once filled out by your employer, will enable you, the employee, to deduct employment expenses from your income.

It can be a bit complicated, so always essential to seek out a professional for advice from a licensed bookkeeper. 

In a nutshell, the rules that apply to an employee says, employees, can claim the deduction for some expenses if one of the following two conditions:

  1. Your home is your principal place of work (meaning you’re required to spend more than half your time working from home) 
  2. You use a particular room(s) exclusively for earning employment income, and you meet customers, or others there on a regular and continuous basis for work.

Most people can quickly meet the first condition under the new COVID-19 work from home policies of their employers; the real question is at the end of the year, how would this new situation apply to your taxes. 

You might want to ask your employer for a corporate letter stating as such and provide them with the T2200 form.

One thing to note, if your office is still open and you have the option to work from home them expenses may not be claimable.

So here’s what you want to prepare to talk to your accountant. 

  1. Your expenses, mortgage/rent, taxes, hydro, insurance, the telecommunications calculated as the pro-rated amount of you need for business. Calculate the square footage of your ‘office space’ vs the rest of your home as a percentage. 
  2. Fixed expenses like a new printer, computer, monitor, paper, pens and other office supplies unless your employee is reimbursing you. 
  3. Will, your employer, fill a T2200 for you, it may be best to wait until the end of the calendar year before asking

Keep track of these now. It can make tax time a lot simpler when you’re prepared! 

$500.00 non-taxable reimbursement for personal computing equipment

On April 22, 2020 the CRA said it would allow a special favorable tax break for employees working from home during the COVID-19 crisis. 

Typically when an employee purchases equipment or supplies for use at home and work, they are considered a taxable benefit and must be included in your T4.  

With all the other things going on right now, keep in mind this is only temporary, so we should keep looking forward! 

I’d like to thank Mr. Shawn Todd of Ecivda Financial for the feed back and reference materials!

Now Keep in mind, Demand ITS is an IT Service provider. Our expertise lies in computers, technology, security and cloud solutions. This blog post is to provide general information only; it is not intended to provide investment advice, legal advice or tax advice, or to answer a specific question about your situation. You should always consult a tax professional for advice or answers.