CRA allowing employees to claim up to $400 work-from-home tax deduction

The Canada Revenue Agency is introducing a simplified process to claim up to $400 in office expenses for Canadians working from home during the coronavirus pandemic.

The process will allow employees to claim these expenses as deductions on their personal income tax return for the 2020 tax year. Eligible employees can claim a deduction if they worked from home more than half of the time over at least four consecutive weeks in 2020 due to the pandemic. This change comes on the heels of the CRA adding home office furniture to the list of expenses employers can reimburse tax-free.

Read: Employers can reimburse $500 tax-free for home office furniture

The temporary flat-rate method will allow eligible employees to claim a deduction of $2 for each day they worked at home due to COVID-19, up to a maximum of $400. Under this new method, employees won’t have to get Form T2200 or Form T2200S completed and signed by their employer.

Employees with larger claims for home office expenses can still choose to use the existing detailed method to calculate their home-office expenses deduction. “The temporary flat rate method and the new user-friendly calculator will make it easier for more Canadians to claim the deductions,” said National Revenue Minister Diane Lebouthillier in a statement.

Read: Survey shows strong support for flexible, remote working post-coronavirus

The government says a shorter qualifying period will ensure that more employees can claim the deduction than would otherwise have been possible under long-standing practice. Statistics Canada said 2.4 million Canadians who don’t normally work from home did so in October. The Canadian Payroll Association says that waiving employees from obtaining employer-signed forms will save employers a total of more than $194 million.