Work From Home Due to COVID? Be Sure to Claim the Deduction!
Employees who work a substantial amount of time from home have always been able to claim a deduction for home office expenses if their employer completed a Declaration of Conditions of Employment form stating they were required to do so.
COVID-19 has resulted in a lot more people working from home, at least some of the time in 2020. The rules have been updated to reflect this 2020 reality, and include a new simplified calculation and the possibility of claiming it without the Declaration from your employer.
If you worked from home at least 50% of the time over a period of at least four consecutive weeks due to COVID, you are eligible to claim the home office deduction. With the new simplified calculation, you can claim $2 per day that you worked from home due to COVID over the entire year, up to a maximum of $400. You do not need to have the Declaration form signed by your employer if you are making this claim.
However, it is still possible to make a claim based on the detailed calculation, where you take a proportionate amount of the various costs of operating your home - exactly which expenses are eligible depend if you are paid by commission or not. And, you do need the Declaration form signed by your employer to claim this way - the good news is CRA has created new simplified forms for 2020 for both the employer to provide the Declaration, and employees to claim the expenses, when working from home due to COVID.
You still need to determine the percentage of space used for doing your work, and the proportionate number of hours that you worked from home, so whether this method provides a greater deduction than the simplified method will vary from person to person. The detailed calculation also includes office supplies and other costs you may have incurred that your employer didn’t reimburse you for, beyond just a proportionate amount of the operating costs of your home.
So, the silver lining to the disruption of having to work from home in 2020 due to COVID is that you can claim a deduction on your 2020 tax return. Whether you claim via the simplified method or obtain the Declaration from your employer and make a claim using the detailed method, be sure to include this deduction on your return if you meet the eligibility criteria!