Canadians Working From Home May Qualify for up to $400 Tax Deduction

December 17, 2020 Updated: December 17, 2020

Canadians may be eligible to claim a deduction on their personal income tax return if they were forced to work more than 50 percent of the time from home for at least four consecutive weeks, the Canada Revenue Agency (CRA) said.

The new “temporary flat rate” method, which allows Canadians to claim a tax deduction for home office expenses, will allow workers who have not had their expenses reimbursed by employers to claim $2 per day for each day they have worked from home in 2020. An individual may claim a maximum of $400 (200 working days) through this method.

“The Government of Canada remains committed to helping Canadians cope with the impacts of the COVID-19 pandemic by making the home expenses deduction more accessible, and easier to claim,” Diane Lebouthillier, the minister of National Revenue, said in a statement on Wednesday.

“The temporary flat rate method and the new user-friendly calculator will make it easier for more Canadians to claim the deductions and is one more demonstration of the CRA’s commitment to ensuring our tax system meets the needs of Canadians.”

Workers who choose the simplified process are not required to calculate the size of their workspaces or keep documents to support their tax deduction claim.

The simplified method will not require employees to have a Form T2200 or Form T2200S completed and signed by their employer, unlike the detailed process that have existed before the outbreak of the CCP (Chinese Communist Party) virus, which causes the COVID-19 disease.

“Today’s announcement is a ‘win-win’ for Canadian businesses and workers alike. It provides a fair and straightforward way for millions of workers, forced to work from home by the pandemic, to claim tax deductions for which they are eligible. Waiving the employee’s need for a T2200 or T2200S will save employers over $194 million collectively, while being able to focus more intently on critical business needs,” said Peter Tzanetakis, president of the Canadian Payroll Association.

This new method can only be used for the 2020 tax year.

The CRA has created a “calculator” and a comprehensive list of eligible home office expenses to help Canadians figure out the amount of their tax deduction.

Senior CRA officials said on Wednesday that approximately 750,000 people claimed home office expenses in their tax returns in 2019, reported Huffington Post.

According to Statistics Canada, roughly 4.7 million Canadians have been forced to work from home since March, due to concerns of community transmission of the CCP virus.