Due to the COVID-19 pandemic, the majority of employees are working at home. Many of our clients have asked whether they can claim their home office on next year’s income tax return.

An employee can claim office-in-the-home expenses if ONE of the following conditions are met:

• The work space is where the work is mainly done (more than 50% of the time).
• The workspace is primarily used to earn your employment income (in normal times, an employee would also use it to meet clients, or other people in this space).

In these difficult times, health restrictions mandate that no one should be meeting the second criteria but most of us likely meet the first work-at-home requirement.

For employed taxpayers, an employer will have to complete a T2200, ‘Declaration of Conditions of Employment’. They will need to indicate that they require an employee to work from home and that the employee is not reimbursed for these expenses.

Employees can then claim the prorata percentage (sq ft of office divided by sq ft of residence) of utilities, supplies, minor maintenance, and rent (in a rented residence). Only commission employees can claim the additional expenses of property taxes and home or tenant’s insurance. Employees cannot claim mortgage interest or depreciation on a home.

During these unprecedented times, if an employee works from home only part of the year, then an additional calculation is required by dividing the number of months worked from home by 12 months.

Office-In-The-Home expenses are an ‘employment expense’ deduction on your income tax return against any income earned in the associated employment position. Employees may be able to claim this deduction and save money or increase their refund.

At Calgary’s Choice Tax Services, we work hard to keep more money in our clients’ pockets. Perhaps you can keep more money in yours……

If you would like more information, please contact us at Sharon@CalgarysChoiceTaxServices.com or (403)703-7176

“We worry about your taxes, so you don’t have to.”