Working from home during COVID-19 and how to claim your expenses. Alberta, Canada.

Ask-Her Tax + Bookkeeping Inc.
February 3, 2021

As an employee, you’re eligible to claim your home office expenses.

Did you work from home for your employer during the Covid-19 pandemic? Whether it was your employer’s choice, or yours, you can claim home office expenses, and we’ll explain what you need to do so!

The Canada Revenue Agency has implemented two methods (Temporary Flat Rate and the Detailed Method) that you can use to claim your home office expenses. Keep in mind that both of these methods require slightly different eligibility criteria and calculations.

TEMPORARY FLAT RATE:

The amount is a substitute for actual home office expenses paid by the employee, such as rent, electricity, home internet access fees, office supplies (e.g., pens, paper) and unreimbursed cell phone costs.

This type of method allows eligible employees to claim a deduction of $2.00 for each day they worked at home in 2020 due to COVID-19, up to $400.00.

ELIGIBILITY FOR FLAT RATE:

  • An employee who was reimbursed for some but not all of their expenses can use the flat rate method as long as they meet the other conditions.
  • The number of days worked at home due to the pandemic includes both full-time and part-time days but not days off (whether for vacation, illness, or another reason).
  • An employee can qualify even if it was their own choice to work at home because of the pandemic. Even though the temporary flat has limited deductions, there are also some advantages. They do not need to determine and summarize eligible costs or keep receipts.

Employees choosing the temporary method do not need to have their employers complete and sign a Form T2200 or T2200S, although they should do their best to document how many days they worked at home.

Employees must use the Form T777S, “Statement of Employment Expenses for Working at Home Due to COVID-19” to report that they are using a flat rate method and calculate their deduction.

DETAILED METHOD:

Employees who worked at home before the pandemic should follow the detailed method for claiming a deduction for 2020.

Qualifying employees using the detailed method must first determine the total of their eligible expenses overall. They must then prorate these expenses (excluding office supplies) based on the portion of their home use for employment.

Eligibility for Detailed Method:

  • Only used their workspace to earn employment income for regularly and continually meeting clients, customers or other people while doing their work.
  • Worked in their home workspace “mainly” (more than 50 percent of the time) for at least four consecutive weeks.
  • Worked from home in 2020 due to the COVID-19 pandemic or were required to work at home by their employer.
  • Have received a signed T2200 or T2200S form from their employer.

The CRA has confirmed the employer’s requirement for an employee to work from home may be written or verbal agreement. It does not have to be part of the employment contract. In addition, where an employee could choose whether to work from home due to COVID-19, the CRA still considers them to have worked from home due to the COVID-19 pandemic.

Happy Taxing!