Working from Home Tax Credits - Keenans Accounting Service

If you collected COVID-19 related benefits last year, you might notice when you do your taxes that you owe much more than in previous years. This is mainly due to CERB payments and some of the earlier benefit payments. These benefits did not have any taxes taken off of them, which means that they must be remitted now. If you worked from home during part of 2020 you may be able to claim some expenses that you might have incurred from working remotely.

You are eligible to claim a deduction for some of your home office expenses – as long as you meet all of the below criteria:

• you worked from home in 2020 due to the COVID-19 pandemic or your employer required you to work from home
• you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020
• your employer did not reimburse you for any or all of your home office expenses
• have a completed and signed Form T2200S or Form T2200 from your employer (only applicable if the detailed method is used to complete the claim)
  the expenses were used directly in your work during the period

 

To make the process easier, the Canada Revenue Agency (CRA) has introduced a new temporary flat rate method to simplify claiming the deduction for home office expenses for the 2020 tax year. This method can ONLY be used for the 2020 tax year. It should also be noted that if you use the temporary flat rate method, you cannot claim any other employment expenses on line 22900 (for example, motor vehicle expenses). If you wish to claim further expenses you will need to use the detailed method.

The detailed method was outlined in our previous blog – What Can I Claim On My Taxes When Working From Home During The Pandemic? – however, there have been a few changes to the detailed method since it was published. You still need to calculate the size of your workspace in relation to your overall home to calculate percentages of what you can claim. You must also have a signed T2200 form. But now the CRA has expanded the list of eligible expenses that you can claim. This now includes home internet access fees, which were previously not claimable. You can find a comprehensive list of all eligible home office expenses that can be claimed when using the detailed method here.

If you plan on using the temporary flat rate method, you do not need to calculate the size of your workspace, keep supporting documents or get a Form T2200 completed and signed by your employer. The temporary flat rate method is used to claim home office expenses that you paid like rent, electricity and home internet access fees, as well as office supplies like pens and paper, and cell phone usage.

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.

Each individual working from home who meets the eligibility criteria can use the temporary flat rate method to calculate their deduction for home office expenses. This means multiple people working from the same home can each make a claim.

If you need further assistance figuring out your 2020 tax return and further deductions that may apply to you, Keenans Accounting Service is here for you. Just give us a call at 705-526-7628 to arrange a consultation by phone or via Zoom meeting. We are practicing social distancing while working remotely, and with reduced staff so please leave us a message, and we will get back to you as soon as possible.