The FAQ below is provided as a useful tool to help answer your employees’ questions related to their 2020 Tax return and Home office expenses deductions. This information is aimed at providing members with general information. This is for guidance only and is not meant to be legal advice. We encourage members to seek legal and or tax advice and to obtain definitive guidance on their side. Employers and employees are encouraged to access the CRA website for more details.
The Canada Revenue Agency (CRA) is encouraging people to file online (as early as February 22, 2021) and to sign up for direct deposit. This will avoid delays in the processing of your assessment.
Gather your information slips and end of year tax documents (such as your T4s ), your receipts, your previous tax year’s notice of assessment, and a copy of last year’s return to use as a model.
You should have received most of your slips and receipts by the end of February.
You may access and view your personal income tax and benefit information and manage your tax affairs online through My Account. If you are not already registered to My Account, you will need to get a CRA Security code. Make sure to plan ahead so you have time to receive your CRA Security code.
If you have not received some of your slips (for example, slips for benefits issued by CRA or Service Canada), you may be able to get them from your My Account as of February 2021. If you previously registered for My Account to apply for the Canada Emergency Response Benefit (CERB), Canada Emergency Student Benefit (CESB), Canada Recovery Benefit (CRB), Canada Recovery Sickness Benefit (CRSB), or Canada Recovery Caregiving Benefit (CRCB), you should enter the security code you received in the mail when you first applied to access all My Account’s features. If you have misplaced the security code, or it has expired, contact the CRA to have a new CRA security code issued to you.
Yes. As the effects of the COVID-19 pandemic may slow down your assessment or impact your ability to receive a refund, benefits, or credit payments, the CRA are encouraging you to file your return early this year.
The deadline to file your return and pay your taxes is April 30, 2021.
The deadline to contribute to your RRSP for the 2020 tax year is March 1, 2021.
You can sign up for direct deposit here. When you sign up for direct deposit you can receive your refund in as little as eight business days, and you’ll avoid any mailing delays on future benefit and credit payments due to COVID-19. To help provide better service to Canadians, the CRA has partnered with many Canadian financial institutions to offer CRA direct deposit enrolment online through your financial institution’s website.
If you received any of the following payments, they are considered taxable income
- Canada Emergency Response Benefit (CERB)
- Canada Emergency Student Benefit (CESB)
- Canada Recovery Benefit (CRB)
- Canada Recovery Sickness Benefit (CRSB)
- Canada Recovery Caregiving Benefit (CRCB)
You will need to file a return and enter the total amount of benefits you received. For any such payments, you will receive a T4A (for benefits issued by the CRA) and/or a T4E (for benefits issued by Service Canada) tax slip in the mail with the information to enter on your return.
You may also view tax slips online as of February 2021 in My Account. If you use Auto-fill my return to file online, the information from these tax slips will be automatically entered into your return, saving you time and effort. You must use a NETFILE-certified software to do this (e.g., Turbo Tax).
In addition, you may owe tax when filing your return. This will depend on your personal circumstances, and the type of COVID-19 benefits you received:
- If you received the CERB or CESB, no tax was withheld when payments were issued, therefore you may owe this tax when filing your 2020 tax return.
- If you received the CRB, CRSB, or CRCB, 10% tax was withheld. However, this may not be all the tax you need to pay. When you complete your personal income tax return, you may need to pay more (or less), depending on how much income you earned in 2020.
There may be impacts to filing your tax return that are specific to the COVID-19 benefit you received, or if you are a resident in Quebec.
Certified software products are available to make online filing easy, and some are free. Go to canada.ca/netfile to view your options. Follow the directions to install the software and enter your tax information as requested. NETFILE is fast, easy, secure, and convenient. If you are registered for My Account, you can also use Auto-fill my return to quickly fill in parts of your return with information the CRA has on file, so you do not have to.
Filing by paper
If you filed your return on paper last year, the CRA will automatically mail you the 2020 Income tax and benefit package by February 19, 2021, but it may arrive later due to COVID-19 delivery delays.
You can download and order forms and publications as of January 18, 2021, at canada.ca/taxes-general-package. Starting February 5, 2021, you can call the CRA at 1-855-330-3305 to order forms and publications.
Home office expenses for employees FAQ
Employees who worked from home more than 50% of the time over a period of a least four consecutive weeks in 2020 due to COVID-19 will now be eligible to claim the home office expenses deduction for 2020. The use of a shorter qualifying period will ensure that more employees can claim the deduction than would otherwise have been possible under longstanding practices.
A new temporary flat rate method will allow eligible employees to claim a deduction of $2 for each day they worked at home in that period, plus any other days they worked from home in 2020 due to COVID-19 up to a maximum of $400. Under this new method, employees will not have to get a Form T2200S completed and signed by their employer.
We encourage employees to try and determine which method they will use before requesting a form T2200S from their employer. Try the Online Calculator
More information on Home Office Expenses for Employees: Click Here
Home office expenses can be claimed as a deduction on an employee’s personal income tax return. A deduction reduces the amount of income they pay tax on, so it reduces their overall income tax liability.
If you were not required to work from home, but your employer provided you with the choice to work at home because of the COVID-19 pandemic, then the CRA will consider you to have worked from home due to COVID-19.
If you meet the eligibility criteria there are now two options to calculate your deduction for home office expenses for the 2020 tax year:
- Temporary flat rate method
- Detailed method
You must still meet the other eligibility criteria to claim home office expenses, available here
If you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020 due to COVID-19, you can claim $2 for each day that you worked at home during that period, plus any other days you worked at home in 2020 due to COVID-19, up to a maximum of $400 (200 working days) for the year.
- You do not need to calculate the size of your workspace.
- Your employer is not required to complete and sign the Form T2200S.
You are not required to keep documents to support your claim.
New temporary flat rate method
You are eligible to use the temporary flat rate method to claim home office expenses if:
- You worked from home in 2020 due to the COVID-19 pandemic or your employer required you to work from home.
- You worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020 due to the COVID-19 pandemic.
- You are only claiming home office expenses and are not claiming any other employment expenses.
You were not reimbursed for all your home office expenses.
Any days that were worked (full-time or part-time) from home can be counted. You may not count:
- Days off
- Vacation days
- Sick leave days
Other leaves or absences (e.g., temporary layoff)
The temporary flat rate method only applies to the 2020 tax year.
Each employee working from home who meets the eligibility criteria can use the temporary flat rate method to calculate their deduction for home office expenses.
The temporary flat rate method is used to claim home office expenses that you paid like rent, electricity, and home internet access fees, as well as office supplies like pens and paper, and cell phone minutes. If you use the temporary flat rate method, you cannot claim any other employment expenses (for example motor vehicle expenses).
Yes, you can still claim the $2 a day if you meet the eligibility criteria.
Yes, you can claim the $2 a day if you meet the eligibility criteria.
Paid leave and unpaid leave are not counted in determining:
- Whether you worked from home more than 50% of the time for a period of at least four consecutive weeks in 2020 due to COVID-19, OR
The total number of days for which you can claim the $2 a day
What if my employer has reimbursed me for some of my home office expenses, can I still use the temporary flat rate method?
Yes, you can still use the temporary flat rate method if you meet the eligibility criteria.
The detailed method applies to eligible employees working from home in 2020 due to the COVID-19 pandemic and eligible employees required to work from home.
With this method:
- You can claim the actual amounts you paid, supported by documents.
You must have a completed and signed Form T2200S from your employer.
You are eligible to use the detailed method to claim home office expenses if:
- You worked from home in 2020 due to the COVID-19 pandemic or your employer required you to work from home.
- You were required to pay for expenses related to the workspace in your home.
- One of the following applies:
- Your workspace is where you mainly (more than 50% of the time) work for a period of at least four consecutive weeks. The period can be longer than a month OR
- You only use your workspace to earn employment income. You can also have to use it regularly and continually for meeting clients, customers, or other people while doing your work.
- Your expenses are used directly in your work.
You have a completed and signed copy of Form T2200S, Declaration of Conditions of Employment for Working at Home Due to COVID-19, from your employer (Note: you cannot claim any expenses that were or will be reimbursed by your employer. Keep a copy of Form T2200S in case the CRA asks to see it.)
Regardless of working at a dining table or in a spare bedroom, there are certain factors to consider when calculating your workspace area. Use the following link to determine your workspace area:Calculating Workspace Area
If you meet the eligibility criteria, you can claim a portion of certain expenses related to the use of a workspace in your home:
- Utilities portion (heat and water) of your condominium fees
- Home internet access fees
- Maintenance and minor repairs costs
- Rent paid for a house or apartment where you live
If you pay for office supplies or certain phone expenses, you may be able to claim those expenses. Although you can claim these expenses, they are not related to the physical workspace in your home and are to be claimed on a different section of Form T777S or Form T777.
Should you have worked from home due to COVID-19 for more than 50% of the time, for a period of at least four consecutive weeks, and wish to claim your expenses using the detailed method, your employer will have to complete and sign a Form T2200S to certify that you worked from home in 2020 due to COVID-19 and had to pay your own home office expenses. Form T2200S is kept by you and is not included with your tax return.
Employees that have requested a Form T2200 in previous years, (to claim kilometers or other allowances), and for whom the work contract provides that they work from home, independently of COVID-19.
Form T777, Statement of Employment Expenses, is used to calculate the employee’s allowable employment expenses. Form T777 must be filed with your tax return.
Form T777S, Statement of Employment Expenses for Working at Home Due to COVID-19, is used to calculate your claim for home office expenses. Form T777S must be filed with your tax return.
What if my employer has reimbursed me for some of my home office expenses, can I still use the detailed method?
Yes, you can still use the detailed method if you meet the eligibility criteria, but you cannot claim any expenses that were or will be reimbursed by your employer.