You may be able to reduce your 2020 incomes taxes with the new tax deduction if you work from home.
Thanks to the pandemic, many people have unexpectedly started working from home instead of going to the office. Is this a temporary change, or will remote work be commonplace even after COVID-19 situation settles down? Only time will tell. But in the meantime, there’s good news for those who worked from home in Canada this year: the Canada Revenue Agency has introduced a new, simplified process for claiming home office expenses!
This simplified tax break is now available to more Canadians and is easier to claim than before. To be eligible, you must have worked from home more than 50% of the time over a period of a least four consecutive weeks in 2020 due to COVID-19. This qualifying period is shorter than before, meaning that more employees working from home will be able to claim the tax deduction.
Those that qualify will receive a flat-rate deduction of $2 per day worked at home due to COVID-19, up to a maximum of $400. Multiple people working from home at the same address can claim the deduction as long as they are eligible. Furthermore, employees no longer need to get any forms completed or signed by their employer.
This temporary flat rate method of claiming the work-from-home tax deduction will be available for the 2020 tax year. It is still not clear whether it will continue for the 2021 tax year. The existing detailed method is still available to use for those with larger home office expense claims.
Do you think this could apply to you and want to calculate how much you’re eligible for? There’s an online calculator designed specifically to assist with that.
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