2020 Income Tax: What you can’t—and can—claim for your work-from-home office during the COVID-19 pandemic

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You furnished a functional home office, you’ve got face masks ready by the door for when you need to run an errand, and you bought sanitizer (so many bottles of sanitizer). You’ve done your part to stay home and help flatten the coronavirus curve. The question now is: Can you write off working from home during the pandemic and any of these things you bought because of COVID on your taxes? We hate to tell you this, but right now, the answer is no. Before we dive into what can’t be written off, let’s address the self-employed people (including myself) reading this piece.

If you’re self-employed

“Nothing has changed, nothing has been announced,” says Jennifer Gorman, the social care manager at Intuit, who answers tax-related questions on the company’s social media channels. (She’s also a tax expert with 30 years’ experience.) If you’re self-employed, continue with your regular tax processes until you hear otherwise from the Canada Revenue Agency (CRA).

If you’re a salaried employee with a T2200—or you want to ask for it

If you’re a salaried employee, you’ve probably heard about the T2200. It’s the form your employer fills out that tells the CRA what aspects of your job are mandatory and for which you have incurred expenses when you work from home, says Gorman. Salespersons who travel a lot with their own personal vehicles are generally provided with the T2200; but who else qualifies? “I’m a good example of a T2200,” she explains. “I’ve always worked from home for this company, so every year they send me a copy of the T2200 that says I was required to use the internet because I work from home. I only get to claim the work-from-home expenses.” Not sure if you have access to a T2200 or if you would even qualify? Ask your employer and/or your HR department.

COVID-related claims for your home office

Let’s look at what expenses may or may not be deducted on your 2020 income taxes, whether you have a T2200 or not.

Masks

Sorry, no. That fabulous Canadian-made mask that shows your love of the Raptors, or your “commitment to sparkle motion” is not deductible—unless you’re working in a field that requires it, says Gorman. If your T2200 permits it, you’re good to go. For the rest of us, until the CRA says otherwise, it’s a no.

Home office furniture

No. Office chairs, a new desk or a new monitor for your computer are considered capital expenses that cannot be automatically deducted by employees. However, according to the Government of Canada, you can deduct the cost of supplies you’ve paid for if you meet all of the following criteria:

Under your contract of employment, you had to provide and pay for the supplies.
You used the supplies directly in your work.
Your employer has not repaid and will not repay you for these expenses.
You keep with your records a copy of the T2200 form, Declaration of Conditions of Employment, which has been completed and signed by your employer.

Check with your boss or HR team to see if your company is offering to cover a percentage of the cost or will fill out the T2200 form. UPDATE: This year, CRA is allowing employers to reimburse employees for up to $500 worth of expenses, including home office furniture, tax-free and without having to get a signed form T2200. As with T2200 requests, check with your boss or human resources to confirm your employer is participating. (Companies are allowed to reimburse; they aren’t required to.) In addition, the federal government announced Nov. 30 that individuals can claim $400 in home expenses on their 2020 income tax return. “[R]ather than adding up all your expenses, and dividing by how many square feet, and how many days or months you’re working from home, [the government will] let you write off $400,” Jamie Golombek, who is the managing director of tax and estate planning with CIBC, told Advisor’s Edge. “You don’t have to keep any receipts; there’s no detailed tracking required.”

Workspace expenses

It depends. These expenses include rent, home insurance (but only if you work on commission; salaried employees cannot deduct insurance), electricity/hydro, cleaning materials, etc. that you pay for as part of maintaining your home. To deduct a portion, the property needs to be the place where you principally work or is used solely to earn income from your employment. If you meet the requirements, you can deduct a portion of those expenses, if your employer permits and provides you with a T2200.

Property taxes

This is a no unless you work on commission, in which case you can deduct a reasonable amount from the total costs with your T2200.

Internet

No, you can’t deduct the monthly service fees, even if your company fills out a T2200.

Phones

The Government of Canada says you could deduct a portion of your basic cell phone service plan with a T2200, if certain conditions are met:

The plan must be reasonable. That means you can defend the plan if asked by the CRA, says Alexandra Macqueen, a Certified Financial Planner. “You can’t write off a large portion of a very expensive all-in-one plan, and you must be able to show…how the phone was used ‘for your employment,’ rather than for personal reasons.”
You can “substantiate the cellular minutes or data consumed directly in the performance of your employment duties (as well as the cost of the minutes or data),” Macqueen adds. That means you will be asked to produce documentation that you used most of the plan for work
The plan’s cost has been divided between personal and employment use on a reasonable basis.

Upcoming tax announcements: Will any of this change?

Gorman says the income tax rules about working from home could change when the federal government returns in the fall, but right now nothing major has been changed in the tax code. On September 11, 2020, the CRA held a consultation via the Canadian Chamber of Commerce to get feedback on the short T2200 form. As of now the T2200 form will be needed as part of your tax filings, but there is discussion about using the T4 form instead. In the meantime, retain all your documentation for anything you’ve purchased or used including all your receipts and statements, just in case changes are made to the tax code in regards to COVID-19. Bookmark and check the Canada Revenue Agency website for announcements.

Comments Cancel reply

Trevor Mitchell says:

September 26, 2020 at 8:06 am

Can water usage be deducted in part as long as we have t2200? Now you use the washroom, wash hands, drink water more now that we are at home.

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Hurray says:

September 29, 2020 at 3:10 pm

Spend on Toilet paper ??

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Jimo says:

October 17, 2020 at 9:30 pm

Trevor/Hurray, no re toilet paper, but water I think is considered part of utilities which could be based on a reasonable allocation.

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Terry says:

November 13, 2020 at 8:27 am

I’d be careful about deducting part of your mortgage payments, as that can disqualify you from tax free capital gains on your principal residence (for that time period). (Or at least make sure it is worth it!)

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Andy Io says:

November 17, 2020 at 3:52 pm

Please consider to correct the typo “T220” under heading “If you’re a salaried employee with a T2200—or you want to ask for it”

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1. MoneySense Editors says:
  
  November 19, 2020 at 8:18 am
  
  Thanks for letting us know.
  
  Reply
Mat B says:

November 26, 2020 at 12:43 pm

This wwas. Very beneficial thank you very much!

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De says:

November 27, 2020 at 10:02 am

Just to clarify if increased internet usage due to working from home, a portion cannot be claimed if using internet for work.

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Dev says:

November 29, 2020 at 4:56 pm

You can claim part of interest on your mortgage. If you are living in a rental property, a portion of rent can also be claimed, if your HR issues T2220.

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Dev says:

November 29, 2020 at 4:58 pm

… please read T 2200, instead T 2220.

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XY says:

December 1, 2020 at 5:44 pm

Students, people who were laid off, and many others got thousands of dollars in benefits. Businesses that closed got benefits. Businesses that closed offices or couldn’t pay their rent got deals.

Meanwhile people who are still working while having to share their own home for work and their kids’ schooling get $400. What a fantastic deal!

Funny enough, renters get to deduct their rent, however homeowners don’t get to deduct their mortgage. And why commission employees get to deduct property taxes and home insurance while salaried employees don’t? I guess we can tell who’s lobbied the government before..

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Frances Tong says:

December 5, 2020 at 4:24 pm

Being a flight attendant the company states we have abide by uniform standards. Alterations, shoe repair, mandatory watch. Can these be claimed?

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1. MoneySense Editors says:
  
  December 16, 2020 at 4:44 pm
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
  Reply
Rich says:

December 7, 2020 at 6:22 am

I live in a studio with kids and had to rent an office to be able to work. I see t2200 has that option, would I be able to deduct those expenses?

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1. MoneySense Editors says:
  
  December 16, 2020 at 4:41 pm
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
  Reply
H. A. says:

December 16, 2020 at 12:12 pm

I agree with XY, its funny that only claim $400 ($60 tax at minimum) and no question asked. If we like to claim beyond that we have to calculate expenses and we are only allowed if we can prove there is an increase but if there is no increase you can’t, ignoring the fact that it is actually used for work now.
So the internet, electric, heating, water, insurance and property tax and so on, can’t be claimed unless proved they were increased due to work at home ignoring that they were shared for work this time.

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Laura says:

January 19, 2021 at 2:32 pm

Given myself a full time student in 2020 who had to do schooling online and my children also did some portion online as well. We were required to have reliable internet, especially myself as the teachers said if our internet froze, shut down blackboard we couldn’t have time added to our tests.
Can we claim internet as none of this was our fault, and we “required reliable internet”

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1. MoneySense Editors says:
  
  January 20, 2021 at 10:23 am
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
  Reply
Tommy John says:

January 31, 2021 at 8:12 am

Government employee, purchased microphone and network hub (100$) which was reimbursed. How does this affect the 400$ tax credit?Is the credit per household member or one household? It appears that, if you worked in 2020, you may claim the credit.

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Victoria Grant says:

February 20, 2021 at 12:46 pm

I think we should be able to deduct the cost of computer equipment with the rise of Covid19.

I have a 2013 Macbook laptop that really requires upgrading for studying at home and participating in zoom classes and this is an expense I was not anticipating coupled with tuition, books, and art supplies.

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matt says:

February 22, 2021 at 11:24 pm

So, ppl start decucting their home office although they’re saving a lot in gas expenses. I need to drive every day, have car and gas expenses and lose an hour every day. What can I deduct?

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Michelle Laporte says:

March 22, 2021 at 5:11 pm

I am trying to find out if the Mandatory Quarantine Expense of renting a hotel room for 14 days is Tax deductible

Reply
1. MoneySense Editors says:
  
  March 23, 2021 at 1:41 pm
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
  Reply
Artur Esau says:

March 23, 2021 at 1:15 pm

I had to buy a new computer for my son due to online learning in High school.
Can I deduct that expense from my taxes?

Reply
1. MoneySense Editors says:
  
  March 23, 2021 at 1:39 pm
  
  We appreciate the question however due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
  
  Reply
Kamal Saeed says:

August 7, 2021 at 6:09 pm

I have a question. What about if I use my spouse car for earning an income for T2200? I jointly pay for expenses but my wife owns the car. Thanks

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1. Courtney Reilly-Larke says:
  
  August 31, 2021 at 3:00 pm
  
  Due to the large volume of comments we receive, we regret that we are unable to respond directly to each one. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with a qualified advisor.
  
  Reply
Carolyn Courtney says:

January 10, 2022 at 8:40 pm

Can the cost of getting a will done be claimed on your income tax

Reply

2020 Income Tax: What you can’t—and can—claim for your work-from-home office during the COVID-19 pandemic

If you’re self-employed

If you’re a salaried employee with a T2200—or you want to ask for it