Worked from home in 2020 due to COVID-19? The CRA has a small surprise for you.
2020 was the year the world flipped upside down for everyone, and 2021 has not made the most promising start so far. With rising COVID-19 cases, more lock downs, new strains, and limited vaccines, the CRA has decided to make some changes for home-based employees. If your employer required you to work from your home, you may claim deductions for home office expenses, such as office supplies, certain phone expenses and space-in-the-home expenses.
There are two methods for calculating the deduction on the 2020 tax return. The first is the Flat Rate Method. If you worked from home in 2020, or worked 50% of the time from home for a period of at least four consecutive weeks in 2020, you may eligible for the $2 per day deduction. This is for each day worked from home with a maximum deduction of $400. (Claim days are those days where you worked from home, either full time or part time hours.) Other employment expenses may be eligible if the employer did not reimburse all home office expenses. With this method, the employer is not required to complete and sign form T2200 and you are not required to keep documents in support of your claim.
The second method is the Detailed Method. This method includes those who worked from home in 2020 as well as eligible employees required to work from home. You can claim the actual amounts paid for qualified expenses, supported by documentation. You must have a signed Form T2200 from your employer.
If claiming the Flat Rate, you do not need to determine your expenses in order to calculate your claim for 2020. This means that other expenses such as motor vehicle expenses, rent, heat, etc., are not claimable. If using the Detailed Method you can claim the following expenses if you are a salaried employee: electricity, heat, water, internet, rent, some repair and maintenance costs, and other utilities. Items that cannot be claimed include expenses such as mortgage interest, principal mortgage payments, home internet connection fees, wall decorations and other capital expenses (replacing flooring, windows, etc.).
To claim, you must confirm your eligibility by checking with the CRA website. If you are applying for the Flat Rate deduction you must fill out form T777S. To claim your deductions for the Detailed Rate, visit the CRA website and fill out either form T777S or T777. Remember, you must have documentation to support your claim when applying for the Detailed Rate.