Home office expenses for employees – What you need to know for the 2022 tax-filing season

CRA SOURCE ARTICLE

Due to ongoing challenges created by the COVID-19 pandemic, many Canadians are still working from home. That’s why the Government of Canada is extending the temporary flat rate method so that Canadians will continue to have a simpler way to deduct home office expenses for the 2021 tax year.

With the temporary flat rate 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 may claim using this method has been increased to $500 (it was $400 in the 2020 tax year) for the 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.

Employees who were not required to work from home in 2021, but who worked from home because their employer gave them the choice to do so, are still considered to have worked from home due to COVID-19.

As a quick refresher, here are some examples of 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 and statutory holidays that you did not work

Using the detailed method?

The detailed method, which remains unchanged for the 2021 tax year, allows an employee who meets the eligibility criteria to claim the employment portion of the actual amount of eligible home office expenses they paid.

For eligible employees who are only claiming home office expenses, Forms T2200S and T777S will again be used for the 2021 tax year. These forms have been updated for 2021 and were made available to Canadians on January 18, 2022, along with other T1 related forms. Eligible employees who are claiming home office and other employment expenses in 2021 should visit How to claim – Home office expenses for employees for information about which forms to fill out, and for more information on home office expenses for employees. 

You can learn more about tax filing by visiting the links above or by scheduling a free consultation with us.