Home office expenses/T2200

CRA has come up with the additional details regarding T2200 and home office expenses. These are expected to simplify the taxation rules for employees and the employers. It consists of information regarding the helpful tools like a comprehensive calculator that covers most of the aspects of taxation, a detailed guide on forms and a redesigned T777S form.

In this release, it has been seen that it mentions a bit about the CPA Canada’s recommendation which is regarding the employees who were claiming home office expenses due to pandemic are generally not required to fill T2200 forms.

The key highlights of this release are:

  • Employees who have been working from home due to pandemic in 2020 and those who have been working from home for more than 50% of time and for at least four consecutive weeks in year 2020, would be able to claim deduction of expenses of home office.
  • The employees have the options to runs a detailed calculation or they also have option to use a temporary flat rate method, in case they qualify.
  • In case, if they use the flat rate method, then T2200 will not be required. If an employee opt for a detailed calculation, an employer would need to provide T2200 form or another form which is the shortened pandemic version of the form (Form T2200S).
  • It come under the capping $2 per day that can be claimed by an individual for each day worked at home with a limit of maximum of $400 (i.e. 200 days).
  • It has also been announced by the CRA that claiming for internet access costs will be possible giving the condition that detailed calculation approach is used for that. However, it seems that the CRA is expecting this cost to be calculated on prorate basis, the similar methods that are used in case of other utilities like heat and electricity.

The recent version of T2200S is comparatively shorter than the simplified version that has been previously circulated by CRA. The only thing an employer is supposed to do is to confirm like if the employees have worked from home due to the pandemic, whether they have been reimbursed for home office costs and the same has been reported on the employee’s T4 form.

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