After much anticipation CRA delivered two methodologies available to claim Home Office Expenses for 2020: Simplified vs Detailed. In the Simplified Method, you can claim a flat rate as long as you meet the eligible criteria. If your employer is reimbursing you for home office expenses you may not claim Home office expenses under this method. In the Detailed Method, home expenses will be accounted for based on actuals. The detailed method appears to be designed for those employees who were already (prior to the pandemic) incurring expenses as part of their employment agreement. These employees were receiving a T2200 Declaration of Employment Conditions. CRA designed a simplified version of this form T2200S to make it easier for employers to comply and allow their employees claim home office expenses. Note that the Eligibility Criteria is different for each method. Let's dive into each method: 1. Temporary Flat Rate - Simplified Method CRA simplified the method to claim Home Office Expenses. You are eligible to use this new method if you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020 due to the COVID-19 pandemic. You can claim $2 for each day you worked from home during that period plus any additional days you worked at home in 2020 due to the COVID-19 pandemic. The maximum you can claim using the new temporary flat rate method is $400 (200 working days) per individual. Read the Eligibility Criteria here.
2. Detailed Method You can use the Detailed Method to claim the home office expenses you paid for the period that you worked from home. To read the Eligible Criteria, click here.
There are a few Eligible Expenses, in fact, 69 new expenses have been added to the list. Read the list here.
But with more eligible expenses the determination of home space has also become more precise. To see what qualifies as Home Office Space, click here.
Hope this issue did not give you a case of in-tax-ication! If so, we can help you explore any of the above options together or any other issues connect with us by filling out the Contact Us Form.