Does Working from Home Give Me New Tax Deductions?
Many people have switched to working from home since mid-March 2020 due to employer and government mandating. But can you claim home expenses now on your tax return that you did not have before? Unfortunately, in most cases the short answer is no. This is because the CRA does not give much room for any flexibility and does not change rules easily.
The self-employment rules are clear where the taxpayer has ordinary and necessary business expenses and does not have an employer.
However, if a salaried employee is considering trying to deduct employment expenses needed for their job and not reimbursed by their employer, you should know three (3) things.
- You must have the receipt for any item deducted that was necessary for you to earn the employment income and for which your employer did not reimburse.
- You need a Form T2200: “Declaration of Conditions of Employment” from your employer that specifies what you need and what they the employer is paying. If the employer notes that you need a home office space at the convenience of the employer, then the dedicated home office space expenses can be used as an expense deduction based on the percentage of employment space.
- And lastly, anyone that is an employee claiming expenses needs to be CRA audit ready. This means you need to accurate about your deductions as noted in points 1 and 2 above.
If you would like to learn more or to set up a consultation call Marlies Y Hendricks, CPA at 416-766-3941.
The above information is of a general nature only and should not be relied upon for specific situations.