Make Sure You Claim the Work-From-Home Tax Benefit

by | Jan 28, 2021 | money hack | 0 comments

We can all agree last year was a tough one, but as always, Fint.Cloud is here to help you find a silver lining. 

In November 2020, the Canada Revenue Agency (CRA) announced it had simplified the rules for tax deductions as it relates to working from home. With so many people saving money on costly commutes and expensive work lunches, a tax deduction makes the ‘WFH life’ even sweeter. Statistics Canada reported 3.3 million Canadians had transitioned to working at home due to the pandemic as of April 2020, so this tax deduction will have a considerable impact for workers nation-wide. The tax deduction covers home office expenses that you paid, such as rent for your work-space-in-the-home, electricity and home internet fees amongst other costs. 

Anticipating an increased number of applicants, the CRA has made the process easier to apply, including: a simplified form (T2200S), no need to measure your office space, and a temporary flat rate method for finding out how much you are eligible for.

Eligibility Checklist for the 2020 ‘Work from Home’ Tax Deduction

If you meet ALL of the criteria:

  • worked from home in 2020 due to the COVID-19 pandemic or by request of your employer.
  • worked more than 50% of the time from home for at least 4 consecutive weeks in 2020.
  • the expenses are used directly in your work during the period.
  • have completed and signed Form T2200S or Form T2200 from your employer (only applicable if the detailed method is used to complete the claim, the simplified method doesn’t require a form!)

Simplified vs Detailed – What’s the Difference?

 With the simplified claiming for home office expenses, a new temporary flat rate method has been introduced by CRA. You can claim $2 for every day you worked from home in 2020, up to a maximum of $400 (200 days per individual). There’s no form required to be signed by your employer, so that alone makes it an appealing choice with less paperwork. It’s important to note that more than one person per household can claim the deduction as long as each household member is eligible, but you won’t be able to claim any other employment expenses (Line 22900) with this flat rate method.

Conversely- maybe you’re not new to the Zoom and pajama-bottoms lifestyle! If you worked from home for more than 200 days, you might be eligible for more than $400 in tax deductions. Then, the detailed method can be used to ensure you capture all the deductions you’re eligible for. But, that’s become easier too with the resources below:

Tax Deadlines

As you know, tax deadlines were extended due to COVID-19 in 2020. This year the deadlines are back to normal timing, so make sure you’re prepared. Here’s the government deadlines for filing your 2020 taxes. 

If you have any questions about this post or tax deductions in general, reach out to us!