Millions of Canadians working from home could qualify for new tax deduction

Millions of Canadians working from home could qualify for new tax deduction

The Canada Revenue Agency has simplified the rules to make millions of Canadians working from home eligible for a tax deduction.

Under the new rules, those who worked from home more than 50 per cent of the time over a period of at least four consecutive weeks in 2020 as a result of the pandemic will be now be eligible for the deduction.

Eligible employees who opt for the simplified deduction will be able to claim $2 for each day they worked from home during that period, plus any other days they worked from home because of the pandemic, up to a maximum of $400. Their employers will not have to sign a special form.

Those with larger claims for home office expenses can still use the existing detailed method to claim a deduction. The CRA is making that easier too.

Under the existing rules, those working from home had to get their employers to fill out a special form, T2200, attesting to the fact that working from home was a condition of their employment. But many employers balked at filling out the complicated form. Now, the CRA has launched two new simplified forms (T2200S and T777S) and a calculator to help those who want to claim home office expenses.

The CRA also has expanded the list of expenses eligible for the detailed working-from-home deduction and will now recognize home internet fees as a deduction.

According to Statistics Canada’s Labour Force Survey, an estimated 2.4 million Canadians who do not normally work from home were doing so in October.

In a statement, Revenue Minister Diane LeBouthillier said the temporary flat rate method of claiming the working-from-home deduction and the calculator will make it easier to claim the deductions.

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“The government of Canada remains committed to helping Canadians cope with the impacts of the COVID-19 pandemic by making the home expenses deduction more accessible and easier to claim,” she wrote.

The $400 work from home deduction was first announced in the government’s fiscal update on November 30.

Elizabeth Thompson can be reached at [email protected]

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