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December 18, 2020

Canada Revenue Agency issues guidance on employee home office expenses and Form T2200

The Canada Revenue Agency (CRA) released detailed guidance on December 15, regarding the home office expense deduction that employees can claim on their 2020 personal income tax return. For 2020, there will be two alternate methods by which employees may be able to claim home office expenses:

  • The new "temporary flat rate method," which provides a deduction of CA$2 per workday at home (to a maximum of $400); and
  • The "detailed method," which is similar to the existing deduction for home office expenses, except that the category of eligible expenses has been expanded to include home internet access fees.

In order to reduce the administrative burden on employers, Form T2200, Declaration of Conditions of Employment, will not be required for employees to claim a deduction under the temporary flat rate method. A simplified version of Form T2200 (which has been significantly abridged from the original) will be required for employees seeking to claim only home office expenses under the detailed method.

A Tax Alert prepared by Ernst & Young Canada, and attached below, provides additional details.


Full text of Tax Alert