Home Office Expenses During COVID-19
Posted On: 25/06/21 - 0

Expenses During Covid

The pandemic forced many businesses to shut down their operations.  Or  mandated to scale back the amount of employees in the office to keep everyone safe and healthy.  A record amount of employees are working remotely from home. The mandates definitely affected you and your business in some way. If you or your employees were mandated to work from home, this is an important read.  Here is some tax information regarding the deductibility of CRA authorized home office expenses.

Firstly, Expenses For Employees

Employees earning commission or salary income can deduct expenses for use of a work space in their home. This applies when they are required to pay for office expenses by their employer. Also, one of two other conditions must be met by the employee. Their work space is  where they spend more than 50 per cent of the time for their employer.  The work space needs to be used exclusively for the purpose of earning employment income.

Secondly, Eligible Expenses

Deductible home office expenses includes utilities, maintenance, home supplies, and minor repairs. This applies to the area that you use for your your home office. This is determined by calculating the square footage of your office versus the rest of your home. In other words, you take the square footage of the workspace area as a proportion of the total finished area. The following information only applies to employees. Employees need to be aware that expenses that will be reimbursed by the employer are not tax deductible.

Thirdly, Supporting Documentation For Expenses

In order for the expenses to be deductible, the employer needs to sign a form called a  T2200 Declaration of Conditions of Employment .   This document states that the employee was required to maintain a workspace at their home. This would certify that the employee meets the conditions in the Income Tax Act.

Temporary Flat Rate Method 

Finally, when it comes to claiming home office expenses, the CRA has simplified things by creating a flat rate method.  If you worked more than 50% of the time from home for a period of at least 4 consecutive weeks in the year due to Covid, you qualify.  You can claim $2 for each day worked from home during that period.  The maximum amount  that you can claim is $400 per individual in 2020. The maximum amount is $500 per individual in both the 2021 and 2022 tax years.  These rates only apply to the 2020, 2021 and 2022 tax years. 

For more information on home office expenses, contact Cheryl @ Padgett Business Services N.W. 

12203-107 Avenue.
Edmonton, Alberta.
T5M 1Y9

Call us:
780.482.7297

cheryl@padgettnw.com