To this day, due to ongoing challenges created by the COVID-19 pandemic, many Canadians are still working from home. With tax time upon us, the Government of Canada is extending the temporary flat rate method. This gives Canadians a simpler way to deduct home office expenses for the 2021 tax year.
Here’s the summary:
With this method, eligible employees can claim a deduction of $2 for each day worked at home in 2021 due to the COVID-19 pandemic.
The maximum amount employees can claim using this method increases to $500 (it was $400 in the 2020 tax year). This goes up to a maximum of 250 working days (200 days in the 2020 tax year).
The eligibility criteria for the temporary flat rate and detailed methods remains the same for the 2021 tax year. In essence, eligible Canadians worked who from home in 2020, 2021, or 2022 due to the COVID-19 pandemic, without receiving reimbursement from their employer, can claim the benefit. .
Also, if you were not required to work from home, but your employer provided you with the choice to work at home, listen up.
In this case, the CRA will consider you to have worked from home due to COVID-19 if you worked more than 50% of the time from home for a period of at least four consecutive weeks in the year (2020, 2021, or 2022)
What qualifies as a work day using the temporary flat rate method:
|Days that can be counted as a work day:|
-Days you worked full-time hours from home.
-Days you worked part-time hours from home
|Days that cannot be counted as a work day:|
-Days off Vacation days
-Sick leave days
-Other leave or absence Weekends
-Statutory holidays that you did not work
Using the detailed method
The detailed method remains unchanged for the 2021 tax year. If you meet the eligibility criteria, you can claim the employment portion of the actual amount of eligible home office expenses paid.
Eligible employees claiming home office expenses will again use Forms T2200S and T777S for the 2021 tax year.
These forms contain updates for 2021. The CRA made available to Canadians on January 18, 2022, along with other T1 related forms.
Finally, eligible employees who are claiming home office and other employment expenses in 2021 should visit “How to claim – Home office expenses for employees. Here, one can find information about which forms to fill out, as well as more details on home office expenses for Canadians.
We hope this helps make clear a few ways to take advantage of saving options this tax year.