Deducting home office expenses for 2020

January 15, 2021 | Gary Weatherup


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Simplified rules for salaried and commissioned employees

Millions of Canadians unexpectedly had to start working from home due to the COVID-19 pandemic. In response, the government announced plans in their Fall Economic Statement to simplify the process for deducting home office expenses. On December 15, 2020, the Canada Revenue Agency (CRA) released the details on a simplified method for claiming these expenses for 2020. This simplified method has made the home office expense deduction available to more individuals.


Methods for claiming home office expenses

For 2020, there are two methods for claiming home office expenses on your personal tax return:

1. Temporary flat rate method
2. Detailed method

To be eligible for the temporary flat rate method, you must only be claiming home office expenses (such as electricity, home internet access fees, and office supplies like pens and paper) and not any other employment expenses (such as motor vehicle expenses). In addition, you can only use this method if your employer has not  reimbursed you for all of your home office expenses. If you’re in a situation where your employer has reimbursed you for some but not all of these expenses, you can still use this method.

Alternately, the detailed method can be used if you’re claiming other employment expenses in addition to home office expenses, or if you have a larger claim and want to deduct the actual expenses you paid for in order to work from home. The detailed method is more complex, as you will need to separate the expenses that relate to your employment from those that relate to your personal use and keep supporting receipts or documents. Your employer must also complete certain forms in order for you to claim expenses under this method.

Please find the attached article that discusses your options more in-depth. It also covers off which home office expenses incurred by salaried and commissioned employees are deductible, as well as whether allowances and reimbursements provided by an employer are taxable.