If you’re one of the many who worked from home during the COVID-19 pandemic, you may be eligible to receive a deduction on your 2020 income tax.
Although some Canadians have been already working from home for years and have been claiming deductions related to work-from-home expenses, Canada Revenue Agency (CRA) has simplified how employees can claim home office expenses on their personal income tax return for 2020.
Jonathan Lefebvre has been working from home during the COVID-19 pandemic,
"An adjustment for sure,” Lefebvre says. He modified his home office to accommodate the many hours spent in front of a computer.
"I got a chair reimbursed."
But the increases he saw in his utility bill because his computer and monitors are running all day, or the changes to the thermostat, will not be covered by his employer.
"I changed the temperature during the day; because, during the winter, we’d have it a couple of degrees lower while we’re not home - but now we’re home all the time, and same thing with the A/C during the summer," says Lefebvre.
Lucky for him, he may be able to get some of that money back at tax time.
CRA has a new simplified process for your 2020 taxes.
"It’s recognizing the fact that we have been working from home," says Sandy Lyons, who is a Canadian Professional Accountants Canada financial literacy volunteer.
According to the CRA website, there are some rules to qualify, including:
- You worked from home in 2020 due to the COVID-19 pandemic or your employer required you to work from home
- You worked more than 50 per cent of the time from home for a period of at least four consecutive weeks in 2020
- The expenses are used directly in your work during the period
You can claim detailed expenses, or a new simplified flat rate.
“The new temporary flat rate method simplifies your claim for home office expenses. You are eligible to use this new method if you worked more than 50 per cent of the time from home for a period of at least four consecutive weeks in 2020 due to the COVID-19 pandemic," says the CRA on its website. "You can claim $2 for each day you worked from home during that period plus any additional days you worked at home in 2020 due to the COVID-19 pandemic. The maximum you can claim using the new temporary flat rate method is $400 (200 working days) per individual."
The detailed method has several steps, including providing proof from your employer that you worked from home, and you’ll need to do some calculations, such as the amount of space your home office is, compared with the rest of your home.
"Not only a calculation of space used, but time used in a week,” says Lyons.
Lyons says using that method might be an advantage for some, especially if you're renting in a high-rent area, using the flat rate is less complicated for most.
"You really don’t have to provide much support for using the simplified method, other than you really have to be reasonable with the days… don’t count weekends unless you worked on a weekend day.”
The CRA website has all of the detailed rules and helpful calculators.