Are we required to provide all employees that worked from home due to COVID-19 with a T2200S form?
Employees may be able to claim a deduction on their income tax return for home office expenses that would reduce their net taxable income and therefore reduce overall income tax liability.
Employees are eligible to claim a deduction if they meet all of the following criteria:
- Worked from home due to COVID-19
- Worked more than 50 per cent of the time from home for a period of at least four consecutive weeks in 2020
- Personal expenses were used for work during the period
Employees may choose one of the following methods to make a claim.
Temporary Simplified Method
The Canadian Revenue Agency (CRA) has introduced a temporary simplified method that will apply to the 2020 tax reporting year. An eligible employee may claim a flat rate and they do not need to measure the area of their workspace, keep supporting documents or obtain a T2200S form completed and signed by the employer. The simplified temporary flat rate is used to claim eligible home office expenses by allocating $2 for each day working from home, up to a maximum claim of $400.
If an employee chooses to use the detailed method, in addition to meeting the eligibility criteria above they will also need to:
- Have a completed and signed T2200S Declaration of Conditions of Employment for Working at Home Due to COVID-19
- Keep supporting documents and cannot claim any expenses that they have been reimbursed for
- Measure the workspace and calculate the percentage of space used for work in relation to the total home space
The CRA has developed a calculator to assist employees with estimating expenses for the year to decide which method to use.
The following resources can be found on Canada.ca:
- Calculate your expenses – Home office expenses for employees
- T777S Statement of Employment Expenses for Working at Home Due to COVID-19
- Compare the claim methods – Home office expenses for employees
- Expenses you can claim – Home office expenses for employees
- How to claim – Home office expenses for employees
Canadian Payroll Association Members can visit payroll.ca/resources/covid19 to view the following resources:
- 2020 Tax Year and Work From Home Expenses (Memo for your employees) (Word)
- T2200 FAQ (PDF)
This question was submitted to the Canadian Payroll Association through their Payroll InfoLine™ during the COVID-19 pandemic. The Payroll InfoLine is accessible to Canadian Payroll Association members, and is one of the many benefits its members enjoy.