In 2021, the COVID-19 pandemic incited a mass exodus from the office and turned 40% of working Canadians into remote employees. Should you be one of these, you most likely converted your spare room into an office. Or, without having a spare room, your dinning table, kitchen table, couch or bedroom has now become the office.
Naturally, we started outfitting these spaces: buying computer monitors, that ergonomic chair, and perhaps a ring light therefore we didn't look completely horrible on video calls. All of that has surely left us having a handful of questions, namely: The amount of this could I claim on my taxes?
What percentage of your home is tax deductible should you work remotely?
If you're self-employed and the size of your workplace space didn't change in 2021, you can continue claiming the same percentage of space in your taxes while you did for that 2021 tax year, together with any related work expenses, for example internet access, any new technology you've purchased for work, and then any work-related materials like subscriptions or notebooks.
If you're newly self-employed, the simplest way to calculate how big your projects space is to take its square footage and divide through the size of your home, after which multiply that by 100. This gives the number of your house that's being used being an office. So the calculation would seem like:
(150 sf ÷ 700 sf) x 100 = 21% of your house is your office.
If you are a salaried employee working from home, let's look at what you ought to do.
The Canada Revenue Agency (CRA) says you can claim a deduction for your house office expenses should you meet the following criteria:
- You worked at home in 2021 due to the pandemic OR your employer required you to work at home.
- You helped a lot more than 50% of the time at home for “at least four consecutive weeks in 2021.”
- You spent cash on work-related products, such as a computer monitor.
- Your employer has filled and signed either the T2200S or T2200 form.
Simplified process for filing office at home expenses
Prior for this tax year, it was as much as remote workers to calculate the percentage of the home they used like a office at home. Now the CRA states that should you meet its criteria, you are able to claim up to $400 per individual in the household. This temporary, simplified method means it's not necessary to keep supporting documents, get a completed and signed T2200 form out of your employer, or attempt to recall the exact sq footage of your house.
If you need to go the detailed route (and yes, the CRA does call it the “Detailed Route”), you can claim the actual amounts you spent but you'll need to keep your documentation, have a completed and signed Form T2200S / Form T2200 out of your employer, and figure out the percentage of your house that has now become the perfect office. If you aren't sure what that number may be the CRA defines how big your house as “all finished spaces,” including kitchens, bathrooms and hallways. It then provides examples of how to calculate your workplace space. Company, you will find diagrams.
Just remember that the CRA says that the size of your workspace should be “reasonable,” so don't go claiming 50% of the entire space as the office. To look for the size of your workspace, the CRA even provides tips along with a calculator.
What else can one claim on my taxes when working at home?
In addition to your workspace, you may also claim a portion of:
- Internet bill (excluding connection fees)
- Utilities related to your condo fees
If you're a worker who creates commission, you are also permitted to claim the suggestions above, however, you may have to cover certain expenses that salaried employees don't. For that reason, commissioned employees can also claim part of their home insurance costs, property taxes, and tools which are reasonable and related to your commission income, like mobile phones, computers, tablets, and fax machines and copiers.
You can't claim everything, though. The CRA won't let you claim mortgage interest, furniture or capital expenses, such as changing a furnace. You'll find the entire list of so what can be claimed here.
The 2021 tax year is going to be a very interesting one. If you need help with deductions, reach out to an accountant or call the CRA. They're probably expecting our calls.