Claiming home office expenses

March 15, 2021 • Tax Planning

Thankfully, the Canada Revenue Agency (CRA) has made it easy for employees to claim home office expenses if you spent more than half of your working hours at home for at least four consecutive weeks in 2020 due to COVID-19. Here are the options available to claim a deduction. 

Using the flat rate method

With the temporary flat-rate method, you can claim a deduction of $2 for each day you worked at home, to a $400 maximum. It’s as simple as completing one line on form T777 Short (form TP-59.S-V in Quebec). You don’t need to keep track of home office expenses or ask your employer to submit a form.

When to choose the detailed method

If you’re eligible for more than the $400 deduction, you can use the detailed method on form T777 Short (form TP-59.S-V in Quebec). Expenses include office supplies, utilities, internet, maintenance and cell phone charges related to work. You can use the CRA’s calculator to see if you’ll come out ahead. Go to canada.ca, search “home office expenses for employees” and choose “calculate your expenses.” Note that you need to keep supporting receipts and records, and your employer must complete form T2200S (form TP-64.3-V in Quebec).

Traditional method still available

You can use the usual T777 and T2200 forms (TP-59-V and TP-64.3-V in Quebec) if you’re claiming expenses unrelated to a home office, such as motor vehicle and travel expenses. These forms also apply to employees required to work from home before the pandemic.

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