FW: 2021 Tax Year and Work From Home Expenses

January 24, 2022

Good Morning,

The following guidance is being provided to TRCA employees to assist with the process of claiming Work From Home expenses for the 2021 tax year.  This information is for guidance only and it is highly recommended that you consult with your accountant to clarify the best option for you.

2021 Tax Year and Work from Home Expenses

The CRA has provided updated guidance on how employees who worked from home in 2021 due to the pandemic can claim up to $500 of home office expenses under its simplified flat-rate method for 2021 and 2022. CRA also issued a simplified Form T2200, just as it did in 2020, for use by employers in cases where employees choose to claim home office expenses under the detailed method.

As with the 2020 tax year, the CRA indicated that employees who worked more than 50% of the time from home in 2021 for a period of at least four consecutive weeks due to the Covid-19 pandemic can claim $2 for each day worked from home during that period. The maximum amount an individual can claim for 2021 is $500 (i.e., $2/day multiplied by a maximum of 250 eligible days), up from $400 for 2020. This simplified method does not require you to obtain a T2200/T2200S form or maintain documented receipts to validate your claim.

• Working days include any day during which an employee performs work, at their home, for the employer. There are no minimum hours attached to this, both full-time and part-time employees may count any day on which they performed work for the employer.
• Non-working days such as weekends, statutory holidays, vacation or sick days are not counted.

For most employees, this simplified method will provide the maximum deduction allowed without the detailed record-keeping normally required for home office deduction claims. You will be able to claim this amount on line 22900, Other Employment Expenses, of your 2020 tax return. This deduction will reduce your taxable income for the year, and will generally result in an income tax refund. However, the amount of the refund may be different based on your unique tax situation.

Expenses exceeding $2 per working day

Depending on your circumstances, you may be eligible for deductions greater than what the simplified method offers. Employees can still choose to claim expenses under the “detailed method” if they expect their eligible expenses to be higher than the maximum amount under the simplified method. For employees using the detailed method, the CRA expanded the list of eligible expenses to include home internet fees.  To make a detailed claim, you will require a confirmation of employment form. Upon request, TRCA may issue a T2200S form to validate your conditions of employment to allow you to make a detailed expense claim for your work at home space.

This will require you to:

• Measure and total the size of your workspace;
• Obtain the total size of all finished areas in your home (including your workspace);
• If using a common space in the home determine average weekly working hours; and
• Collect and maintain supporting documents for all of the expenses you can claim for the period(s) you worked from home, eligible expenses include:

• Electricity
• Heat
• Water
• Utilities portion of condominium fees
• Home internet access fees
• Maintenance and minor repair costs
• Rent paid for a house or apartment where you live
• Supplies or certain phone expenses if you employer requires you to pay

In the event of a CRA audit, you must be prepared to present valid proof (e.g. receipts, floorplans, rental contracts, etc.) of any deductions you have claimed.

Before requesting a T2200S form we suggest you use the tools that the CRA has created to assist you in estimating a detailed work from home expense claim. As with the examples we have provided you may find the non-accountable method provides the greater deduction.

The following tools are available from CRA:

• A comprehensive list of eligible expenses; and
• A calculator to assist you in determining the eligible claim amount
• https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-22900-other-employment-expenses/work-space-home-expenses.html

 For those choosing to complete a detailed expense claim,  please request a T2200S form by completing the attached Attestation form and e-mail to Payroll@trca.ca

John Arcella

Controller, Finance