Did You Work from Home in 2020? Deductions May Be Available

COVID-19 caused many people to start working from home. CRA has made the home office expenses deduction available to more Canadians and simplified the way employees can claim these expenses on their personal income tax return for the 2020 tax year. Employees with larger claims for home office expenses can still choose to use the existing detailed method to calculate their home office expenses deduction (see final paragraph).

Please note that any expenses that you were reimbursed for are not claimable.

The table below provides the two new ways to claim a deduction for your 2020 personal taxes. If you are eligible for both methods, you should use the method which results in the largest deduction.

Method	Eligibility	Required Information to Complete Your Tax Return
T777-Short: Temporary Flat Rate Method	You must have worked more than 50% of the time from home for at least four consecutive weeks in 2020 due to COVID-19	You must know the number of days you worked from home. Multiplying the number of days by $2 provides you with your claim (up to a maximum of $400). Please see Option 1 in Form T777S.
T777-Short: Detailed Method	Must meet all three eligibility criteria: Worked more than 50% of the time from home for at least a month (four consecutive weeks) in 2020. The period can be longer than a month. Have a completed and signed Form T2200 Short, Declaration of Conditions of Employment for Working at Home Due to COVID-19, from your employer. Kept all your supporting documents.	You will need to have receipts for and total your expenses into the following categories (please see eligible vs non-eligible expenses noted under Option 2 of Form T777S): Office supplies Other expenses House Expenses: Electricity, heat, water, home internet access Maintenance (cleaning supplies, light bulbs, etc.) Home insurance (commission employees only) Property taxes (commission employees only) Other expenses (rent, etc.) Once summarized, you will need to enter and perform calculations under Option 2 in Form T777S.

There is a third method for receiving a deduction for employment expenses, including working from home. The above methods are exclusively used for 2020, though we will likely see this extended as the COVID-19 pandemic continues. This third method (T777 standard form) has been available for decades and will probably be available for decades to come (provided no tax laws changes). The eligibility conditions are more strict than the methods mentioned above, but additional items can be claimed (e.g., auto, travel, meals, and CCA claims are allowable provided eligibility conditions are met). For more details on this, see CRA’s publication T4044 or contact us.

Sincerely,
The Team
Colin, Tyler, Humberto and Sharon