Working from Home?
2020 Home Office Deduction
Depending on the nature of your position, you may have found yourself working from home during the pandemic. Recently, the CRA detailed their guidance on claiming home office deductions available for individuals for the 2020 tax year.
Option 1 - Simplified method
Under this method, a $2/day tax deduction is available to a maximum of $400 (200 days). The requirement is you must have worked more than 50% at home for at least 4 consecutive weeks if you select this option. This option is best served for those who only had modest expenses working from home, without the need to track expenses or provide an employer-certified T2200 Form.
Option 2 - Detailed Method
Under this method, the potential deduction can be higher. Prorated expenses (based on the square footage of your home office relative to total square footage of residence) of eligible expenses can be claimed. This, for salaried employees, includes electricity, heat, water, condo fees, rent, maintenance and minor repairs, as well as home internet services. This method requires an employer-certified T2200 Form.
The above deductions pertain to individuals who are employees. Should you be self-employed or incorporated, home office deductions follow different criteria.
Speak to the Partners at Evolve for any questions you may have on home office deductions. The CRA has also provided a calculator tool - click the link to our CRA resources section below to access it.
