The recent pandemic forced many Canadians to suddenly switch from working in an office setting to working from home. Before this year, meeting all the conditions to deduct home office expenses was difficult. But the Canada Revenue Agency and the Ministry of Finance recently eased this eligibility criteria and made it easier to manage the home office expenses claim process when you file your taxes.
In response to this change, the Ministry of Finance remarked that this action was designed to make claiming home office expenses available to more Canadians and to also make it easier for Canadians now working from home to claim these expenses when they file their taxes for 2020. To make this possible, the agency implemented two separate options:
- Option 1: Temporary Flat Rate Method—If you choose this option, you can claim a deduction of $2 for every day you worked from home during the pandemic, as well as any other days you worked from home in 2020. The maximum amount you can claim through this method is $400. You do not have to ask your employer to complete a T2200 or Form T2200S to claim this deduction.
- Option 2: Detailed Method—You can also claim home office expenses under the detailed method if you meet certain conditions. To claim the deduction under this option, your employer must have required you to work from home in 2020 because of the pandemic, you must have been required to pay for home office expenses, you must have worked in your home office space at least 50% of the time, and all expenses you claim must be directly related to your work.
We encourage you to take advantage of this deduction this tax season, whether you choose the temporary flat rate method or detailed method to claim this deduction. Ask us at BlueRock Wealth Management for additional advice on this deduction when you prepare to file your taxes for 2020.