Worked from home during the pandemic? Claim these expenses

As an employee, if you worked from home during the pandemic, you may be able to claim certain home office expenses.

This deduction is claimed on your personal income tax return and can help reduce the amount of income you pay tax on, reducing your overall income tax liability.

Who is eligible?

There are two options that can be used to make a claim, and both have different eligibility criteria (click a method for more details).

Temporary Flat Rate Method
Detailed Method

Temporary Flat Rate Method

Eligibility criteria

To use this method to claim the home office expenses you paid, you must meet all of the following conditions:

• You worked from home in 2020, 2021, or 2022 due to the COVID-19 pandemic
• You worked more than 50% of the time from home for a period of at least four consecutive weeks in the year
• You are only claiming home office expenses and are not claiming any other employment expenses on line 22900
• Your employer did not reimburse you for all of your home office expenses

What if you chose to work from home? If you were not required to work from home but your employer provided you with the choice to work at home because of the COVID-19 pandemic, then the CRA will consider you to have worked from home due to COVID-19.

What if your employer has reimbursed you for some of your home office expenses? You can still use the Temporary Flat Rate Method if you meet the eligibility criteria.

Expenses you can claim

If you are using Temporary Flat Rate Method , you do not need to determine your expenses to calculate your claim for home office expenses.

With this method, you can claim:

• home office expenses that you paid like rent, electricity and home internet access fees
• office supplies like pens and paper, and cell phone minutes

You are not required to keep documents to support your claim.

Determining your work space use

If you are using the Temporary Flat Rate Method , you do not need to determine the size of your work space to calculate your claim.

How much can you claim?

Using the Temporary Flat Rate Method, you can claim:

• $2 for each day you worked from home in 2020, 2021, or 2022 due to the COVID-19 pandemic
• up to a maximum per year of $400 in 2020 and up to $500 in 2021 and 2022

Example 30 days worked from home x $2.00/day = $60.00

An expense claim calculator is provided on the Government of Canada's website HERE.

Detailed Method

Eligibility criteria

To use this method to claim the home office expenses you paid, you must meet all of the following conditions:

• You worked from home in 2020, 2021, or 2022 due to the COVID-19 pandemic OR Your employer required you to work from home
• You were required to pay for expenses related to the work space in your home
• Your work space is where you mainly (more than 50% of the time) work for a period of at least four consecutive weeks in the year OR You only use your work space to earn employment income and you also have to use it regularly and continually for meeting clients, customers, or other people while doing your work
• Your expenses are used directly in your work
• You have a completed and signed copy of Form T2200S - Declaration of Conditions of Employment for Working at Home Due to COVID-19 from your employer OR You have a completed and signed copy of Form T2200 - Declaration of Conditions of Employment from your employer

What if you chose to work from home? If you were not required to work from home but your employer provided you with the choice to work at home because of the COVID-19 pandemic, then the CRA will consider you to have worked from home due to COVID-19.

What if your employer has reimbursed you for some of your home office expenses? You can still use the Temporary Flat Rate Method if you meet the eligibility criteria.

Expenses you can claim

If you are using the Detail Method, you must separate the expenses between your employment use and non-employment (personal) use of your home. The work-space-in-the-home expenses include:

Salaried and Commission Employees electricity, heat, water, utilities portion (electricity, heat, and water) of your condominium fees (see details), home internet access fees (see details), maintenance and minor repair costs (see details), rent paid for a house or apartment where you live (see details)

Commission Employees only home insurance, property taxes, lease of a cell phone, computer, laptop, tablet, fax machine, etc. that reasonably relate to earning commission income

Office supplies and phone expenses If your employer requires you to pay for office supplies or certain phone expenses, you may be able to claim those expenses, however, they are not related to the physical work space in your home. They are claimed on a different section of Form T777S or Form T777.

Expenses you cannot claim mortgage interest, principal mortgage payments, home internet connection fees, furniture, capital expenses (replacing windows, flooring, furnace, etc), wall decorations

Limitations on expenses The work-space-in-the-home expenses you can claim are limited when:

• You work only a part of the year from your home You can only claim the expenses you paid in the part of the year you worked from home and not the expenses you paid for the whole year.
• You have multiple income sources You can claim work-space-in-the-home expenses only from the income the expenses relate to and not from any other income.
• Your expenses exceed your income The amount you can claim for work-space-in-the-home expenses is limited to the amount of employment income that is left after you have deducted all other employment expenses, meaning that you cannot use work-space-in-the-home expenses to create or increase a loss from employment.

An expense claim calculator is provided on the Government of Canada's website HERE.

Determining your work space use

If you are using the Detailed Method, you will need to determine the size and use of your work space to calculate your claim.

PERCENTAGE OF YOUR HOME YOU USE AS A WORK SPACE

Use this formula to determine the percentage:

Size Of Work Space ÷ Size Of Home x 100 (to convert to percentage)

Example 40m² ÷ 400m² x 100 = 10% of your home used

TYPES OF WORK SPACES

There are two types of work spaces:

• common (shared) area
• designated room

Common (shared) area A common area is a space that has other purposes besides your work (for example, working at a kitchen table or using the family computer room).

Designated room A designated room is used only for your work (for example, a spare room).

HOURS PER WEEK YOU USE THE SPACE FOR WORK

The number of hours you use the space for work can affect the amount of expenses you can claim and depends on the type of your work space:

Common (shared) area Your claim is based on your employment use of the space and is determined using the number of hours the space is used for work.

Example 40 hours worked in a week ÷ 168 total hours in a week x 100 (to convert to percentage) = 23.8% time you can claim

Designated room Your claim is not affected by the number of hours you use the space for work.

NUMBER OF WORKERS IN THE HOME

One employee working in the home If only one person in your home uses a work space, that person will claim the whole employment use of that work space.

Multiple employees working in the same home

• Different work spaces Each employee will calculate their employment use of the work space they are using.
• Sharing the same common area work space Each employee will calculate their employment use of the work space they are sharing.
• Sharing a designated work space Each employee will calculate their employment use of the work space they are sharing.

CHANGE OF WORK SPACE

If you use different work spaces in your home, or you move to a new property, you will need to claim the expenses you paid for each work space separately.

How much can you claim?

To estimate your claim when using the Detailed Method, we recommend using the expense claim calculator provided on the Government of Canada website.

GO TO CALCULATOR

To view the full equation for the Detailed Method calculation, go HERE.

Questions?

If you have any questions about this article or claiming home office expenses, please contact the Avail CPA Help Desk using the form below.