Mohammad Hossain, CPA, CGA
If you worked from home, then you are eligible for tax credits under either of the following ways.
A. Temporary flat rate method
B. Detailed method
Following are the brief explanations.
A. Temporary Flat Rate Method
Eligibility
First check if you are eligible for work from home (WFH) credit. You must meet all of the following:
1. WFH is due to COVID-19 pandemic,
2. WFH in 2020, 2021, or 2022,
3. WFH is more than 50% of the time and for at least four consecutive weeks,
4. No other employment expenses are claimed (on line 22900),
5. There is no full reimbursement by the employer (if there is partial reimbursement, then you can claim WFH credit).
How much is the credit?
$2 per day and a maximum $400 per individual in 2020 tax year (maximum 200 days).
$2 per day and a maximum $500 per individual in 2021 and in 2022 (maximum 250 days).
Why this method is simple?
– No need to keep supporting documents,
– No need to get Form T2200S or Form T2200 signed by your employer.
How would you claim this credit?
1. Count the number of WFH days and multiply by $2,
2. Enter the amount in Line 9939 on Form T777S and then to Line 22900.
B. Detailed Method
Eligibility
First check if you are eligible for work from home (WFH) credit. You must meet all of the following:
1. WFH is due to COVID-19 pandemic, or your employer required you to WFH
2. WFH in 2020, 2021, or 2022,
3. You were required to pay expenses related to home work space,
4. Your home work space can be a designated room or a shared space, and WFH is more than 50% of the time and for at least four consecutive weeks,
5. Your employer has completed and signed either Form T2200 or Form T2200S,
6. There is no full reimbursement by the employer (if there is partial reimbursement, then you can claim WFH credit),
7. All the expenses you paid are directly used in the work.
How much is the credit?
There is no maximum limit, but the expenses should be reasonable.
How would you claim this credit?
1. Talk with your employer to identify whether you will be granted Form T2200 or T2200S (if not granted, then you can use “Flat Rate Method”)
2. Gather and sort WFH related expenses,
3. Claim the expenses (which are supported by For T2200 or Form T2200S) in the tax return form T777 or T777S.
What documents should you keep?
For the next six years keep Form T2200 or T2200S and all relevant expense receipts, supporting documents and records.
Source: Canada Revenue Agency
Disclaimer: This write up is not a professional advise.