Claiming Home Office Expenses in 2020
In 2020, a number of people worked from home for a part of the year. Some returned back to the office, some kept working from home. There is a special simplified tax provision available for 2020 to reflect those unique circumstances with regards to reporting a home office and expenses associated with it.
As you start pulling information together for your tax returns this year, there are five things to know about this reporting position in your 2020 tax return:
- Determining which approach works best for you? Flat rate or Detailed method. Either would be available to you if you worked from home due to COVID-19 more than 50% of the time for a period of at least 4 consecutive weeks.
- The Flat Rate Method is $2 per day up to $400. This only includes days at home, not vacation, holidays, days in the office. If you do use this option, you cannot claim other employment expenses such as km, although you do not need to save or gather backup receipts for expenses.
- As an alternative, Detailed method requires you to identify your space, and report eligible expenses. To do this you will need form T2200 or T2200S from your employer and you will need to save your receipts as back-up should they be requested by CRA.
- Eligible expenses vary based on type of income: commission vs salary. Ensure you report only the eligible expenses. For example, only commission sales employees can report home insurance and property tax.
- Office space for the Detailed method can be a designated space, a common space such as the dining room table or a space shared by two individuals. CRA has provided guidance on how to calculate, depending on which is applicable to you.
Additional considerations:
- Did you go back to working at the office?
- Did you work a blend between home and the office?
- Did you move during the year?
Importantly, if you were reimbursed for all of your expenses, you cannot report based on either method.
Please reach out to your tax advisor for more information on how you can benefit from claiming home offices expenses in 2020.
