Federal government allows up to $ 400 for home office expenses

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“This measure will help taxpayers access the deductions to which they are entitled and will simplify the tax filing process,” the economic statement said.

“They are trying to put in place a simplified system,” said Jamie Golombek, general manager of tax and estate planning at CIBC Financial Planning & Advice. “So rather than adding up all your expenses and dividing by how many square feet and how many days or months you work from home, [the government will] let you write off $ 400. You don’t have to keep receipts; no detailed follow-up is required. ”

Under the current rules of the Income Tax Act, employees working at home can claim certain eligible household expenses, such as fuel oil, supplies, utilities, repairs and the cost of maintaining a home. home office. These expenses must be distributed in the same proportion as the workspace occupies in a house. In order to claim these expenses, an employee must have their employer complete and sign form T2200: Declaration of working conditions, which certifies that the employee was to work from home.

Taxpayers will still be able to claim under the existing rules if they wish, Golombek said.

“If someone lives in a 450 square foot condo, uses half the condo to work half the time, and pays rent, that could add up to a huge amount of home office expense. [that can be claimed]. »

The government’s Fall Economic Statement proposal aims to provide a streamlined process for claiming home office expenses, while addressing the issues that would arise if millions of Canadians now working from home asked their employers to complete and sign the T2200 form. The Department of Finance and the Canadian business and tax community have consulted in recent months on how to speed up the process.

“Canadians who work from home may already deduct some home office expenses for tax purposes, but new claimants may not know the rules,” according to the economic statement, “and the claims process places an administrative burden on employers who are already doing business. with the broader impacts of the pandemic and must provide additional information for their eligible employees.

The government said more details on the process will be released by the CRA in the coming weeks.

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