Claiming work-related expenses on your tax return

With the 2020 tax return deadlines creeping upon us, there are many questions you as an employee may have regarding work-related expenses and how to claim these deductions on your tax return. With COVID-19 affecting everyone, more people have been required to work from home than ever, which has resulted in an increase in employees using and paying for their own resources to complete their day-to-day work tasks. We are here to answer some of the concerns you may have regarding these expenses.

Claiming home office expenses

Employees who are required to work from home and use their own resources — supplies, home offices, cell phones and so on — can qualify to claim expenses on their income tax return. In order to relieve employees of these costs, the Canadian government introduced new methods that employees can use to claim these deductions for the 2020 tax year. One method is called the Temporary Flat Rate Method.

In order to be eligible, you must meet the following requirements:

1. You are required to work from home due to COVID-19.
2. You have worked from home over 50% of the time for the last four weeks.
3. You are using these expenses directly for working purposes.

If qualified, you can claim up to $2 per day for each day you worked from home during the eligible period. The maximum amount you can claim using this method is $400, which equals 200 working days. Multiple people in your home can claim these benefits if they each qualify.

This method is easier to use than in past years, as the government has removed the requirement to calculate the size of your workspace and various other figures. There is also no longer a need to have your employer complete a T2200 form if you are using the temporary flat rate method. Note that any days used as a vacation day, sick day or similar cannot be included in your calculation.

Claiming motor vehicle expenses

A common confusion that arises when employees claim deductions is what does and does not qualify as a motor vehicle expense. With COVID-19, many employees may be required to work from home but must travel to the office occasionally. So the question is: can you claim these trips as travel expenses?

In normal circumstances the answer would be no, since you are travelling from your home to your place of employment and that does not qualify for a deduction. However, where COVID-19 requires employees to work from home for a much larger share of their time, this could mean you are now travelling from one place of employment to another. In that case, you would qualify to receive deductions.

Simplifying the process for claiming home office expenses — Canada.ca