Grey-Bruce Kids Spring 2021

FINANCE
Working-from-home
tax deductions
COVID-19 PANDEMIC CREATES NEW TAX DEDUCTIONS
FOR MANY CANADIANS BY SUSAN CRUICKSHANK
2020 was a year to remember
It was a year that saw millions of businesses and Canadians
pivot to working from home in a very short time. This
certainly wasn’t without challenges, however working from
home can provide a tax benefit on your personal return.
The deduction for home office expenses is not a new, however,
pre-pandemic, many people in the workforce did not meet the
requirements to claim it. To claim home office expenses the
employee must either work principally from their home office
(more than 50 per cent of the time) or regularly and continually
meet clients in their home office. This criteria may be met by
many more taxpayers in 2020 due to the pandemic and their
work-from-home arrangements. In addition, to claim home
office expenses in 2020, you are only required to work from
home for at least four consecutive weeks during the calendar
year.
The deduction for home office expenses will reduce your income
for tax purposes — similar to childcare expenses or an RRSP
contribution. The tax benefit of home office expenses is directly
tied to your marginal tax rate. For example, a $400 home office
deduction will result in about $118 in taxes saved if a person
makes $50,000 per year, however the same $400 deduction
will result in about $174 in tax savings for a person who makes
$120,000 a year.
Under normal circumstances your employer would have to
complete a T2200 for an employee to claim home office
expenses. The T2200 certifies that your employer required you
to work from a home office and notes which (if any) expenses
were paid by the employer. The T2200 can also be used if
your employer required you to use your vehicle for business,
purchase tools as an apprentice, and many other employment
expenses. There is no requirement for employers to provide
this form regardless if their employees worked from home,
however Canada Revenue Agency (CRA) traditionally denies the
deduction for home office expenses if one isn’t provided.
For the 2020 year, the CRA has provided a T2200S, which is a
simplified version of the T2200 form. This will ease the burden
on employers who provide a T2200 to their employees.
When a T2200 or T2200S is provided, employment expenses
can be claimed on Schedule 777 of your personal income tax
return. This allows for a deduction of basic utilities such as
electricity, heat, water, and/or the utilities portion of any condo
fees; home Internet fees, maintenance and minor repair costs,
and rent. If you are a commissioned salesperson, you can also
claim your home insurance, property taxes and the lease of a cell
phone, computer, laptop, etc., to the extent of your commission
income.
You cannot claim mortgage interest or principal payments,
home Internet connection fees or modem rentals, furniture,
purchases of items such as a desk, chair, or computer, or home
renovation or decorating costs. You may be able to claim a
We’re scientists,
engineers, safety
experts. And
PROUD CANADIANS.
At the Nuclear Waste Management Organization, we’re responsible for
Canada’s plan for the safe, long-term management of used nuclear fuel.
Canada’s plan involves safely containing and isolating used nuclear
fuel in an area with suitable geology and informed, willing hosts.
Every day, we are conscious of our duty to be accountable to
Canadians—to work and learn together, and to protect our safety,
our environment and this beautiful land.
Dig deeper, learn more
by visiting nwmo.ca
@NWMOCanada
22 GREY-BRUCE KIDS • SPRING 2021 greybrucekids.com • 23