2020 was filled with unprecedented challenges due to the COVID-19 pandemic. Many people unexpectedly had to work from home, which resulted in millions of Canadians setting up a workspace in their kitchens, bedrooms and living rooms.
In response, the Honourable Diane Lebouthillier, Minister of National Revenue, announced in December 2020 additional details on how the Canada Revenue Agency (CRA) has made the home office expenses deduction available to more Canadians, and simplified the way employees can claim these expenses on their personal income tax return for the 2020 tax year. Employees with larger claims for home office expenses can still choose to use the existing detailed method to calculate their home office expenses deduction.
Employees who worked from home more than 50% of the time over a period of a least four consecutive weeks in 2020 due to COVID-19 will now be eligible to claim the home office expenses deduction for 2020. The use of a shorter qualifying period will ensure that more employees can claim the deduction than would otherwise have been possible under longstanding practice.
A new temporary flat rate method will allow eligible employees to claim a deduction of $2 for each day they worked at home in that period, plus any other days they worked from home in 2020 due to COVID-19 up to a maximum of $400. Under this new method, employees will not have to get Form T2200 or Form T2200S completed and signed by their employer. Contact your advisor or tax professional for further information.
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