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Employment Expenses for Working at Home Due to COVID-19 – details on new rules and simplified forms

Wednesday January 20, 2021

The Canada Revenue Agency (CRA) recently released details on its temporary home office expense rules for eligible employees who worked from home in 2020 due to COVID-19. These measures include a flat-rate method for employees with modest expenses and a simplified form for employers.

Under the flat rate method, employees can claim $2 for each day they worked from home due to COVID-19 to a maximum of $400. Employees are eligible to use this method if they were required to work more than 50% of the time from home for a period of at least four consecutive weeks in 2020 due to COVID-19 and are not claiming any other employment deductions.

Alternatively, employees meeting these requirements can also elect to use the detailed method and claim home office expenses without a maximum limit (but not exceeding their employment income for the year) if they receive a signed Form T2200S (or Form T2200) from their employer.

Form T2200S (Declaration of Conditions of Employment for Working at Home Due to COVID-19) is a simplified version of the standard Form T2200. Employers will need to complete, sign, and provide one of these forms to employees who use the detailed method. Neither Form T2200 nor Form T2200S is required for employees using the flat rate method.

Note: Form T2200S should be used when employees are only claiming office supplies and home office expenses under the detailed method. The standard Form T2200 should be used if employees are claiming additional employment expenses such as motor vehicle expenses.

Form T777S (Statement of Employment Expenses for Working at Home Due to COVID-19) is a simplified version of the standard Form T777. Employees claiming home office expenses using either the flat rate or the detailed method will need to include Form T777S with their personal income tax return.

The CRA will be accepting electronic signatures on Form T2200S and Form T2200 for the 2020 tax year, and has created a new calculator on its website to help employees calculate and claim their home office expenses.

Additional details, including a full list of eligible office supplies and home office expenses, can be found here.