COVID-19 required many Canadians, some for the first time, to work from home. Whether you worked from your home office or your kitchen table this year, two new techniques for claiming employment expenses have been introduced: the temporary flat rate method and the detailed method.
On a new form called the T777S: Statement of Employment Expenses for Working at Home Due to COVID-19, you’ll choose one of these methods to determine your work-related expenses.
Here’s everything you need to know about claiming your COVID-19 expenses if you worked from home.
What expenses am I allowed to deduct?
Long-distance calls made for work, home Internet connection costs, rent paid for your house or apartment, and utilities such as electricity and heat are all eligible charges. You can utilize the money you spent on these expenses to lower your tax bill when you file your 2021 return.
Visit the CRA website for a complete list of eligible expenses.
Who is eligible to file a claim for their expenses?
Because of COVID-19, employees who spend at least 50% of their hours working remotely for four consecutive weeks in 2020 can use these methods. This applies to both full-time and part-time employees.
If you went to work, you might be able to claim your expenses as long as you worked from home the majority of the time.
Remember that vacation days, sick days, and other days off are not included in the one-month timeframe.
The temporary flat rate method
You can make a claim without a signed form from your employer or receipts for your expenses if you use the temporary flat rate method. You can deduct $2 per day you worked from home, up to a total of $500. In other words, you have the option of claiming up to 250 days.
Did you have to share a home office with someone else? It’s no problem! Using the temporary flat rate method, more than one individual can claim the same workspace, and you won’t have to split the expense.
The detailed method
You must utilize the detailed method if you wish to claim the amount you paid for your work-related expenses rather than a flat rate.
First, make sure you have all of your supporting documentation, such as receipts for your expenses and your employer’s signed T2200S: Declaration of Conditions of Employment for Working at Home Due to COVID-19 form. The T2200S form serves as confirmation that you worked from home and covered your expenses.
Then you’ll figure out how much you can claim on the T777S form. The amount you can claim is determined by the following factors:
- The total size of your home
- The size of the area you usually worked in
- If the workspace was in a shared area, like the kitchen, or if it was in a designated area, like a spare room or home office
- How many hours you work there every week
- How many people used the space for work (if more than one person worked in the same area, you’ll need to split the workspace based on how much each person used it)
A guide to assessing the size and use of your workplace may be found on the CRA website. You can also use the CRA’s calculator to figure out how much money you can deduct for work-related expenses.
Need help claiming your employment expenses? IDM Professional Corporation CPA can help!
