Claiming Home Office Expenses On Your Taxes Has Been Changed & Here's What You Need To Know
Changes have been made to Canada's taxes that might make it more difficult for you to claim home office expenses.
When filing your tax return with the Canada Revenue Agency this year, you'll need to do a few extra steps to get this deduction.
For the 2020, 2021 and 2022 tax years, you didn't have to keep track of your actual work-from-home expenses and could claim a flat rate instead.
New for 2023, the CRA has ended the temporary flat rate method and you're required to use the detailed method and get a completed Form T2200, Declaration of Conditions of Employment from your employer to claim home office expenses.
If you don't know, you can deduct certain expenses you paid to earn employment income when filing your taxes.
That includes home office expenses for employees like work-space-in-the-home expenses, office supplies and certain phone expenses.
This is a deduction that's claimed on your personal income tax return. Deductions reduce the amount of income you pay tax on.
Who can claim home office expenses?
There are a lot of eligibility criteria for who can claim home office expenses for the 2023 tax year.
Your employer must have required you to work from home.
For 2023, if you voluntarily entered into a formal telework arrangement with your employer, you're considered to have been required to work from home.
You must have been required to pay for expenses related to the workspace in your home.
Your workspace must be where you mainly worked for at least four consecutive weeks in the year or only used to earn employment income and for in-person meetings with clients, customers, or other people
Your expenses must be used directly in your work.
You must have a completed and signed copy of Form T2200, Declaration of Conditions of Employment from your employer.
What home office expenses can you claim?
There are quite a few home office expenses you can claim on your 2023 tax return.
All salaried employees and commission employees can claim:
- electricity
- heat
- water
- utility portion (electricity, heat and water) of your condominium fees
- home internet access fees
- maintenance and minor repair costs
- rent paid for a house or apartment where you live
Commission employees can also claim:
- home insurance
- property taxes
- lease of a cell phone, computer, laptop, tablet, fax machine, etc. that reasonably relates to earning commission income
If your employer requires you to pay for office supplies or certain phone expenses, you could be able to claim those expenses.
Office supplies include leased computers or tablets, highlighters, ink cartridges, notebooks, pens or pencils, printer paper, stationery, sticky notes, toner, and more.
Salaried and commission employees can't claim mortgage interest, principal mortgage payments, home internet connection fees, furniture, capital expenses or wall decorations.
If you and your spouse both worked from home, you have to decide which expenses each of you will claim because each expense can only be claimed once.
You can use the CRA's calculator to figure out your home office expenses.
How do you claim home office expenses?
You can claim home office expenses on the Income Tax and Benefit Return that you file with the CRA.
Now, for your 2023 tax return, you have to use the detailed method which allows you to claim the actual amounts you paid rather than the flat rate like in previous tax years.
You must complete Form T777, Statement of Employment Expenses and get a completed and signed Form T2200, Declaration of Conditions of Employment from your employer.
When filing your taxes, enter the amount from line 9368 on Form T777 on line 22900 — other employment expenses on your tax return.
Form T777 must be filed with your tax return but Form T2200 is kept by you and isn't included with your tax return.
The CRA said to keep Form T2200 and any receipts, supporting documents and records for six years.
This article's cover image was used for illustrative purposes only.
