Message from Rob Burwash, director, Human Resources and Vince Malvaso, director, Financial Services
With the transition to working from home as a result of the COVID-19 pandemic, many questions have come up regarding eligibility for home office deductions that employees may be able to claim on their 2020 tax return and whether the College will be issuing T2200/T2200S forms.
The Canada Revenue Agency has released some guidance related to work from home expenses for employees working from home due to COVID-19 pandemic for 2020, including a new temporary flat rate method (known as the simplified method) and new options to claim actual amounts you have paid (known as the detailed method). CRA’s discussion of these two methods for the 2020 tax year can be found in this link: CRA Guidance.
T2200S Form
Understanding that some employees may have claims that exceed the $400 provided under the simplified method, Niagara College will provide the T2200S form for all eligible employees in Employee Self-Serve by the end of February 2021. There is no need to request this form from the College. Each employee can review the CRA tools provided below to determine whether the Flat Rate or Detailed Calculation is better for their personal situation.
Flat Rate Method (Simplified Method)
The Canada Revenue Agency (CRA) recently announced a temporary simplified method that will allow employees who worked at home due to COVID-19 more than 50% of the time for at least four consecutive weeks during the pandemic, to claim an amount of $2 per working day (up to a maximum deduction of $400). 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 many employees, this simplified method will provide the maximum deduction allowed without the detailed record-keeping normally required for home office deduction claims.
Detailed Calculation Method
Depending on your circumstances, you may be eligible for deductions greater than what the flat rate method offers.
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.
To make a detailed claim, you will require a confirmation of employment form (T2200S). Please note the T2200S form only validates the condition of employment requiring you to work from home because of the COVID-19 pandemic. It does not provide the value of your eligible deductions, as that is a personal tax matter. 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. The CRA also occasionally performs in-person inspections of home office claims looking at, among other details, proof that the space is being used solely or jointly for working purposes.
Please note it is the employee’s responsibility to review the rules and determine their eligible expenses.
The following tools are available from CRA:
