Working from Home (WFH) Personal Tax Deductions

Updated: Mar 16




On March 11, 2020, the WHO officially declared COVID-19 as a global pandemic. The pandemic caused a major shift to the workforce and working from home (WFH) has become commonplace. People have had to incur additional expenses to work from home, and invest in things like webcams, microphones.


You may be able to deduct certain WFH expenses on your 2020 personal tax return. This can make your 2020 personal tax return more complicated. The team at Clearly Financials would like to share some information to bring some clarity and to continue to support individuals and families in our local Edmonton community.


Eligibility Requirements for Claiming WFH Expenses

  1. You worked from home in 2020 due to COVID-19 or your employer required you to work from home.

  2. You worked from home more than 50% of the time, for a period of at least 4 consecutive weeks.

  3. The expenses are used directly in your work during the period.

  4. You were not reimbursed for all of your expenses


Methods to Claim WFH (Working from Home) Expenses


1. New Temporary Flat Rate Method - $2/day, up to $400/year

2. Detailed Method – Requires your employer to provide you with form T2200 or T2200S


New Temporary Flat Rate Method

(Recommended for most people)

The new temporary flat rate method is by far the simplest way to claim WFH expenses. You may claim $2 per day to a maximum of $400 per individual. You are not able to claim other office or employment expenses, such as printer ink and stationary, under the flat rate method.

If you alternated between working from home and going to your regular place of employment, you may still claim the $2/day as long as there was a period of 4 consecutive weeks that you worked from home.


Download our WFH template from our resources page to calculate your number of days in a few easy steps.


Days that can be counted:

  • Days that you worked full-time hours from home

  • Days that you worked part-time hours from home

Days that cannot be counted:

  • Days off

  • Vacation days

  • Sick leave days

  • Other leave or absence


Documentation Required for Flat Rate Method

  • None!

  • No form is required from your employer.

  • No additional documentation is required.


Due to the simple nature of the Temporary Flat Rate Method, it is recommended for most people.


Tip: Multiple people in the same household may claim the flat rate method without splitting it.


Detailed Method

The detailed method of claiming working from home expenses may be familiar to people that have claimed employment expenses in the past. This was available prior to the pandemic and is not new. You can claim employment related expenses on your personal tax return if your employer provides you with form T2200 - Declaration of Conditions of Employment. Your employer details the types of expenses that you had to incur in order to earn employment income on this form. If you receive a T2200, the detailed method may be used to claim other employment expenses, such as motor vehicle expenses.


Documentation Required for Detailed Method

  • Form T2200 from your employer

  • Invoices and receipts for home expenses

  • Invoices and receipts for other employment expenses


Detailed Method for Working from Home Expenses Only

There is a simplified detailed method of claiming employment expenses. The difference is that only working from home expenses may be claimed. Expenses such as motor vehicle expenses may not be claimed. Your employer will need to provide you with form T2200S - Declaration of Conditions of Employment for Working at Home Due to COVID-19. Employers may prefer to provide this simplified form in order to reduce the amount of paperwork they need to prepare.


Download our WFH template from our resources page, and complete the second tab to record your detailed working from home expenses.


Documentation Required for the Detailed Method for Working from Home Expenses Only

  • Form T2200S from your employer

  • Invoices and receipts for home expenses




Types of Working from Home Expenses


  1. Working from Home Expenses

  2. Eligible Office / Phone Expenses

  3. Other Employment Expenses


Working From Home Expenses

Employees claiming the detailed method may claim the following home expenses.


For salaried and commission employees

  • Electricity

  • Heat

  • Water

  • Utilities portion of condo fees

  • Home internet access fees

  • Maintenance and minor repair costs

  • Home rent


For comission employees only

  • Home Insurance

  • Property taxes

  • Leases of cell phone, computer, laptop etc. that reasonably relate to earning commission income


Cannot be claimed

  • Mortgage payments

  • Home internet connection fees

  • Furniture

  • Capital expenses (Renovations to the home)

  • Wall Decorations

Pro-Rating Your WFH Expenses

Determine the Size of your Home Office

Your work from home expenses are pro-rated based on the amount of space that you use to WFH, compared to the size of your entire home (furnished portion).


Example: If your office is 100 sq. ft. and your home is 1,000 sq. ft. you may claim 10% of your eligible expenses.

The CRA has illustrated examples of how to calculate the size of your Home Work Space on their website.


Shared Space / Common Areas

If the space that you are using is a common area, rather than a dedicated work space, you must further pro-rate the square footage by the number of hours that you work.

Example: If you work for 40 hours per week / 168 hours in a week = 23.8% pro-ration for time.
Continuing the previous example of a 100 sq. ft. workspace in a 1,000 sq. ft. home, you would be entitled to claim only 2.38% (10% * 23.8% ) of your home office expenses.

Tip: If you are using a shared space to WFH, considering using the simplified method.

Eligible Office Supplies

You can claim expenses, or portions of expenses, that you use for work. The item must be used up while directly performing your job. e.g. Paper, pens, ink cartridges.

You cannot claim items that are not used up. e.g. Web cams, microphones, USB keys.

The CRA has a list of common home-office supplies.


Eligible Phone Expenses

You can claim a portion of your basic service plan (minutes and data) as long as the cost of the plan is reasonable and you apportion the cost between employment and personal use.

You cannot claim the purchase price of the phone, accessories, cases, connection fees, or protection plans.


Other Employment Expenses

Your employer must provide you with form T2200 in order for your to claim other employment expenses. Examples of other employment expenses are as follows:


For Salaried or Commissioned Employees

  • Allowable motor vehicle expenses

  • Travelling expenses

  • Parking cost

  • Supplies

  • Other expenses

For Commissioned Employees Only

  • Accounting and legal fees

  • Advertising and promotion

  • Food, beverages, and entertainment expenses

  • Lodging


In Closing

We understand that these are challenging times for many individuals and families in Edmonton. We are working diligently at Clearly Financials to support our local communities through these unprecedented changes.


Realize that you are not alone, that we are in this together and most importantly that there is hope.


For other COVID-19 resources please view our news blog .

Follow us on Facebook for updates.

Disclaimer

This is a summarized version of complex matters that are rapidly changing. The preceding information is provided for general, educational purposes only. Speak with one of our team members if you have any questions about your specific accounting or tax situation.



Clearly Financials Chartered Professional Accountants. Cloud-Based Accounting and Taxation Solutions for you and your small business.

Clearly Financials offers Smart Accounting and corporate tax services to small businesses in Edmonton, AB. We provide a full suite of services including: Bookkeeping, Payroll, GST filing, Notice to Reader Financial Statements, and Corporate Tax Returns.


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Our office is located in Old Strathcona in Edmonton, Alberta.

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