Canadians working from home can get up to $500 back this tax season

If you’ve been stuck working at home for yet another year due to the COVID-19 pandemic, you might be able to get some extra cash this tax season.

Earlier this month, the Canada Revenue Agency shared a notice announcing the extension of the temporary flat rate method so that Canadians have an easier way to deduct home office expenses for the 2021 tax year.

🔔 NEW! Information for the upcoming tax-filing season:

➡️ major tax changes
➡️ improvements to our services

Find out what’s new this year ➡️ https://t.co/o7A7E7lfRH #CdnTax pic.twitter.com/kbMfm5nm7r

— Canada Revenue Agency (@CanRevAgency) February 11, 2022

Just like last year, it means that eligible employees can claim a tax deduction of $2 for each day they worked at home during 2021 due to the pandemic.

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This year however, workers can claim even more money. You can get up to a total of $500 back across 250 days, which is up from $400 across 200 days last year.

“If you were not required to work from home, but your employer provided you with the choice to work at home because of the COVID-19 pandemic, then the CRA will consider you to have worked from home due to COVID-19,” the CRA website states. 

Applicants must meet the other eligibility criteria to claim home office expenses and choose either the temporary flat rate method or the detailed method when submitting claims.

If accumulated expenses add up to more than $500, additional money can be claimed through the detailed method.

The government has a list of approved expenses that can be deducted this way, which includes electricity, heating, water, the utility portion (electricity, heat, and water) of condo fees, internet access fees, maintenance, minor repair costs and even “rent paid for a house or apartment where you live.”

What you need to submit the claim

The CRA created the T2200S form, a shorter version of the T2200 that employers complete if you worked from home in 2020, and form T777S, used to calculate your claim for home office expenses.

For the simplified method, all you need is form T777S. You then claim the deduction on your tax return by entering the amount from Line 9939 on Form T777S to Line 22900, “Other employment expenses,” on your 2021 income tax return. Form T777S must be filed with your tax return.

It’s important to note that each year, the CRA conducts a number of review activities to maintain the integrity of the Canadian public’s confidence in the Canadian tax system. The CRA may review your claim to validate your eligibility.

There is also a calculator to help you claim the home office expense deduction that you are entitled to.

For the detailed method, you need to complete Form T777S or Form T777 and get a completed and signed Form T2200S or Form T2200 from your employer.

For those who have made their dining room table their office space, there’s some compensation ready for you to claim.