Claiming Work-From-Home Expenses: A Guide to Form T2200

In the wake of the COVID-19 pandemic, the traditional office landscape has undergone a drastic shift. With countless employees adapting to remote work, the concept of a home-office has taken center stage. As organizations reevaluate their work arrangements, employees find themselves grappling with new tax reporting requirement: Form T2200-Declaration of Conditions of Employment. In this blog, we will explore how Form T2200 works, and the steps to claim these deductions.

During the Covid pandemic between 2020-2022, eligible employees who worked from home for at least four consecutive weeks in a year could claim a flat rate of $2 per day for each day worked from home during that period. Also under this method, Temporary Flat Rate Method, any additional days worked from home in the same year due to the pandemic can also be claimed. The maximum amount the employees could have claimed under this method was $400 per individual for the year 2020 and $500 per individual for both 2021 and 2022.

Now that COVID-19 pandemic has come to an end and employers encourage employees to return to physical offices, the Canadian government has discontinued the Temporary Flat Rate Method for claiming Work-From-Home (WFH) expenses, which was applicable during the pandemic. Instead, employees are now required to present a signed Form T2200 from their employer to substantiate their home office expenses.

In a real-life scenario, the author of this blog found himself in an unexpected situation after filing his 2022 tax return. Nine long months passed without any communication or explanations for the delay were provided from the Canada Revenue Agency (CRA). In such instances, the Office of the Taxpayers’ Ombudsperson (OTO) can help in resolving such issues related to the Canada Revenue Agency (CRA). The OTO operates independently from the CRA and focuses on improving taxpayer service by reviewing service-related complaints. The OTO reviews individual complaints and systemic issues related to taxpayer service rights. They also examine service issues that could impact a large number of taxpayers or specific segments of the population.

Employees who work from home need to understand the main components of this form and how they affect their taxes:

Conditions of Employment: In this section of the form, the employer provides a detailed description of the employee’s job duties and responsibilities. This description helps determine whether the employee is eligible to claim specific expenses related to their employment. For example, commission employees can claim home insurance, property taxes, as well as lease of equipment where non-commission employees are not eligible to claim such expenses.

Allowances: : These are payments made by the employer to cover certain expenses. These payments can either be included or excluded from the employee’s T4 slip. If the employee has received an allowance from the employer for certain expenses, only amounts over and above the allowance can be claimed.

Reimbursements: These are amounts paid back to the employee for expenses incurred. These payments can either be included or excluded from the employee’s T4 slip. If the employee has received reimbursements from the employer for certain expenses, only amounts over and above the reimbursements can be claimed.

Work-From-Home Expenses: The form requires the employer to specify what percentage of the employee's duties of employment were performed at their home office and whether the employer reimbursed the employee for such expenses. Similar to allowances and reimbursements, only amounts over and above the reimbursements can be claimed.

Home office expenses that both non-commissioned and commissioned employees can claim, as well as the additional expenses specific to commission employees are:

Common eligible expenses for both groups:

Utilities (electricity, heat, and water)

Home internet access fees

Maintenance and minor repair costs

Rent paid for a house or apartment where you live

Expenses only commission employees can claim:

Home insurance

Property taxes

Lease of equipment

Expenses that cannot be claimed by either group:

Mortgage interest and principal mortgage payments

Home internet connection fees

Capital expenses (i.e. furniture)

You can claim home office expenses using the detailed method, which allows you to claim the actual amounts you paid. If you are only claiming home office expenses, such as work-space-in-the-home, office supplies, and certain phone expenses, use Form T777-Statement of Employment Expenses and enter the relevant amounts on line 22900 of your tax return.

For further information please contact Taxtron Support at 416-491-0333 or visit www.taxtron.ca