Here's how to save money on your taxes in Canada if you work from home

Work-from-home tax credits in Canada are what you’ll need to know about if you worked more than 50% of the time from home for a period of at least four consecutive weeks due to lockdowns in 2020, 2021, or 2022.

If so, then you may be eligible to receive up to a $500 tax deduction through Canada’s temporary flat rate method home office expenses claim.

The temporary flat rate method simplifies your claim for home office expenses, including work space-in-the-home, office supply, and phone expenses.

This method means you don’t have to actually calculate the size of your workspace or keep supporting documents, and your employer doesn’t have to complete and sign certain tax forms.

Who is eligible?

In order to use this method to claim the home offices expenses you paid, you must meet all of the following criteria:

• You worked from home in 2020, 2021, or 2022 due to the pandemic (if you were not required to work from home, but your employer provided you with the choice to work at home, then the CRA will consider you to have worked from home)
• You worked more than 50% of the time from home for a period of at least four consecutive weeks in the year (2020, 2021, 2022)
• You are only claiming home office expenses and are not claiming any other employment expenses on line 22900
• Your employer did not reimburse you for all of your home office expenses (even if your employer reimbursed you for some of your home office expenses, you can still use the method if you meet the eligibility criteria)

How do I submit the claim?

Next, you must count the total number of days you worked from home in the year due to the pandemic and multiply that by $2 per day. You can also claim any additional days you worked at home during the year due to lockdowns.

The maximum amount that can be claimed is $400 per individual in 2020 and $500 per individual in 2021 and 2022.

Use “Option 1 – Temporary flat rate method” on Form T777S to enter these amounts and attach it to your income tax return for the year.

Then, claim the deduction by entering the amount from line 9939 on Form T777S to line 22900 “Other employment expenses” on your income tax return.

The Government of Canada also provides a detailed guide on how to claim the deduction through the temporary flat rate method on their website.

What about the detailed method?

Another option is to follow the detailed method, which allows you to claim the actual amounts you paid, supported by documents.

You must complete Form T777S or Form T777 and get a completed and signed Form T2200S or Form T2200 from your employer.

Although it’s possible that the detailed method could result in a greater tax deduction, it requires more time and effort to complete.

The government of Canada also provides a detailed guide on how to claim the deduction through the detailed method on their website.

You might also like:
• Here are the best ways Canadians can get a bigger tax refund this year

What are the eligibility requirements for the detailed method?

To claim the actual expenses you paid for working from home through the detailed method, you must meet all of the following conditions:

• One of the following applies:
  1. You worked from home in 2020, 2021, or 2022 due to the pandemic
  2.  Your employer required you to work from home (this does not have to be a part of your contract and may be a written or verbal agreement)
• You were required to pay for expenses related to the workspace in your home
• One of the following applies:
  1. Your workspace is where you mainly (more than 50% of the time) work for a period of at least four consecutive weeks in the year, OR
  2. You only use your workspace to earn employment income. You also have to use it regularly and continually for meeting clients, customers, or other people while doing work
• Your expenses are used directly in your work
• One of the following applies:
  1. You have a completed and signed copy of Form T2200S, Declaration of Conditions of Employment for Working at Home Due to COVID-19, from your employer, OR
  2. You have a completed and signed copy of Form T2200, Declaration of Conditions of Employment, from your employer