Claiming Method Options
There are two temporary methods employees can choose from when claiming home office expenses on their tax returns:
- Temporary Flat-Rate Method
- Simplified Detailed Method
Using either method is currently allowed for the 2020, 2021, and 2022 tax years.
Crowe MacKay’s tax advisors review the details of each below.
Temporary Flat-Rate Method
The Temporary Flat-Rate Method is the simpler of the two methods to use when calculating your home-office expenses. The use of this method is described below.
- Employees may claim $2 for each day worked from home
- The maximum amount that can be claimed is $400 or 200 working days per individual in 2020 and $500 or 250 working days per individual in 2021 and 2022
- Working days can include full-time and part-time days worked from home
- Vacation days, sick days, or other leaves or absences cannot be claimed
T777S Form Required
When using the Temporary Flat-Rate Method employees are required to submit a T777S form to calculate their home-office expenses.
Download a fillable PDF T777S form
Detailed Method
The Detailed Method requires employees to provide more details as they can claim their actual home-office expenditures. Details that employees must provide include:
- Type of workspace: is the employee working in a common area (i.e. kitchen) or designated workspace (i.e. home office)
- Size of workspace: what is the size of the home and workspace used
- A signed T2200S form by the employer
Please be advised that the above linked forms are for the 2021 tax year only.
Should you complete a T777 or T777S form?
When claiming actual amounts paid you must complete a T777 or T777S form. Details on each are described below.
- Complete a T777 if you are claiming home-office expenses and other employment expenses (for example, motor vehicle) under the traditional method.
- Complete a T777S if you are claiming the actual amount of home office expenses as a result of working from home due to COVID-19 and are not claiming any other employment expenses.
Your Crowe MacKay advisor can complete the relevant form for you when preparing your return.
Do I need a T2200 or T2200S form?
The main difference between the T2200 and T2200S forms are:
- T2200 is needed if an employee has other employment expenses such as travel or supplies they would like to claim.
- T2200S is designed specifically for employees only claiming home office expenses because of COVID-19.
Neither the T2200 or T2200S form needs to be filed with your tax return but the form should be kept for your records in case CRA requests it.
CRA is accepting electronic signatures on forms T2200 and T2200S to ensure the health and safety of Canadians.
Which method is best?
When determining if an employee should use the Temporary Flat-Rate Method or the Simplified Detailed Method, it’s important to understand that each individual’s’ situation is unique and needs to be reviewed on a case-by-case basis. There are factors that will impact which method you choose including if you rent or own your home, as well as if you want to claim automobile expenses (to do this you must use the traditional Simplified Detailed Method). The Simplified Detailed Method is more complex and the employee is responsible for maintaining their records, while the Temporary Flat-Rate Method does not require keeping receipts. It is recommended that you contact your Crowe MacKay advisor to discuss which method best suits your individual circumstance.
