Tax Updates – 2020 tax year only (filed in 2021)

CRA has made your life easier. They knew 2020 was a difficult year and improved the reporting process to help. You will find some details and links to further information below.

Working from home

https://www.canada.ca/en/revenue-agency/news/2020/12/simplifying-the-process-for-claiming-a-deduction-for-home-office-expenses-for-employees-working-from-home-due-to-covid-19.html

You can use the Simple or Detailed method. Simple requires the T2200S AND T777S be filled and signed by your employer. If you have other types of employment expenses, use form T777.

The Temporary Flat Rate Method offers you a claim of $2 per day worked at home excluding holidays, sick days and other days off.

Compare the claim methods

For your 2020 tax return, there are two options: Temporary flats rate method or Detailed method.

Temporary flat rate method

Applies to:

  • eligible employees working from home in 2020 due to the COVID-19 pandemic

With this method:

  • you can claim $2 for each day you worked from home in 2020 due to the COVID-19pandemic, up to a maximum of $400
  • your employer is not required to complete and sign Form T2200
  • you are not required to keep documents to support your claim

Detailed method

Applies to:

  • eligible employees working from home in 2020 due to the COVID-19 pandemic
  • eligible employees required to work from home

With this method:

  • you can claim the actual amounts you paid, supported by documents
  • you must have a completed and signed Form T2200S / Form T2200 from your employer

(CRA, Feb 3, 2021, https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/work-space-home-expenses/compare-methods.html)

Can be claimed

All salaried employees and commission employees can claim
  • electricity
  • heat
  • water
  • utilities portion (electricity, heat, and water) of your condominium fees Footnote 1
  • home internet access fees Footnote 2
  • maintenance and minor repair costs Footnote 3
  • rent paid for a house or apartment where you live Footnote 4
Commission employees can also claim
  • home insurance
  • property taxes
  • lease of a cell phone, computer, laptop, tablet, fax machine, etc. that reasonably relate to earning commission income

Cannot be claimed

Salaried employees and commission employees cannot claim

  • mortgage interest
  • principal mortgage payments
  • home internet connection fees
  • furniture
  • capital expenses (replacing windows, flooring, furnace, etc)Footnote 5
  • wall decorations


Forms

T2200S

https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t2200s/t2200s-20e.pdf

T777S

https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t777s/t777s-20e.pdf

T777

https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t777/t777-20e.pdf

(CRA, Feb 3, 2021, https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/work-space-home-expenses/expenses-can-claim.html)