Did You Work from Home in 2020?
The COVID-19 pandemic means that many more employees work from home (WFH) who did not do so before the pandemic. If you are one of them, you may be eligible for a new temporary flat rate deduction announced by the Canada Revenue Agency (CRA). As the name implies this deduction is temporary and currently only applicable to the 2020 tax season.
The new flat rate deduction allows eligible applicants to claim $2 for each day they worked from home due to COVID-19 up to a maximum of $400 per individual.
You are eligible to apply for the new flat rate deduction if you are an employee who meets ALL of the following criteria. If you are self-employed, you can click here to find out more about claiming “Business-use-of-home expenses”.
• You worked from home in 2020 due to the COVID-19 pandemic.
Note: This applies even if you were not required to work from home but chose to do so because of the COVID-19 pandemic.
• You worked from home for more than 50% of the time for a period of at least 4 consecutive weeks
• You are only claiming home office expenses and not any other employment expenses
• Your employer did not already reimburse you for ALL of your home office expenses. Note: If your employer reimbursed you for part, but not all of your home office expenses, you are still eligible to apply for the remainder.
You can claim days that you worked from home either full or part-time. However, you can not claim days off, vacation days, sick leave, or other leaves of absence.
Should I Use the New Flat Rate or the Existing Detailed Method?
The new flat rate method is designed to simplify the process for claiming home office expenses. However, the flat rate method may not be the best option for everyone. If you were already working from home prior to 2020, or have a larger claim, you can continue to use the existing method for claiming home office expenses. The following chart breaks down the key differences between the two methods:
|Temporary Flat Rate Method||Existing Detailed Method|
|• You can claim $2/day you worked from home due to COVID-19 up to a maximum of $400||• You can claim the actual (full) amounts you paid, regardless of COVID-19|
|• You do not need to keep documents to support your claim||• All amounts claimed must be supported by documentation|
|• Your employer is not required to complete or sign any forms||• You must have a completed and signed T2200S/ T2200 form from your employer|
The health and well being of you and your businesses is our number one priority. If you have any questions at all about the Government of Canada’s COVID-19 response or how it might affect your business, please don’t hesitate to reach out. Or click here to see the CRA’s list of frequently asked questions related to home office expenses for employees.