Remote Work Tax Deductions Guide

Eligibility Requirements

General Requirements

• Worked from home due to employment duties
• Not reimbursed by employer for expenses
• Worked from home more than 50% of the time OR
• Used the space exclusively for work

Not Eligible If:

• Self-employed (different rules apply)
• Employer reimbursed you
• Chose to work from home (not required)

Method 1: Simplified (Flat Rate)

How It Works

• Claim $2 for each day worked from home
• Maximum $500 per year (250 days)
• No receipts required
• No T2200 required

Requirements

• Worked from home due to COVID or other reason
• Worked from home more than 50% of time
• Track days worked from home

Pros and Cons

• Pros: Simple, no paperwork, guaranteed claim
• Cons: Maximum $500, may be less than actual costs

Method 2: Detailed (Actual Expenses)

Requirements

• Form T2200 from employer (or T2200S simplified)
• Keep all receipts
• Calculate workspace percentage
• Determine work-use proportion

Eligible Expenses (Employees)

• Rent (if renting)
• Electricity
• Heat
• Water
• Home internet access
• Minor repairs to workspace
• Maintenance supplies for workspace

Additional for Commission Employees

• Property taxes
• Home insurance
• Mortgage interest (not principal)

NOT Eligible

• Mortgage principal
• Furniture (generally)
• Home purchase price
• Renovations
• Capital cost allowance (unless commission)

Calculating Your Deduction

Step 1: Calculate Workspace Percentage

Method A: Square footage

• Workspace area ÷ total home area
• Example: 100 sq ft ÷ 1,000 sq ft = 10%

Method B: Number of rooms

• 1 room ÷ total rooms
• Example: 1 ÷ 8 rooms = 12.5%

Step 2: Shared vs Dedicated Space

If workspace is shared (e.g., dining room):

• Calculate work hours ÷ total hours used
• Example: 40 hrs work ÷ 168 hrs week = 24%
• Apply this to workspace percentage

Step 3: Calculate Total

• Total eligible expenses × workspace %
• × shared space % (if applicable)
• = Deductible amount

Example Calculation

Dedicated home office:

• Annual rent: $24,000
• Utilities (heat, electric, water): $3,600
• Internet: $1,200
• Total: $28,800
• Workspace: 10% of home
• Deduction: $2,880

Shared space (dining table):

• Same expenses: $28,800
• Space: 10% of home
• Work use: 24% of time
• Deduction: $28,800 × 10% × 24% = $691

T2200 Form Requirements

What Employer Certifies

• Required to work from home
• Not reimbursed for expenses
• Nature of employment conditions
• Commission vs salaried status

T2200S (Simplified)

• Shorter version for home office only
• Fewer questions
• Sufficient for most WFH claims

How to Get It

• Request from employer/HR
• They must sign and date
• Keep with your records
• Don't submit with return (CRA may request)

Special Situations

Part-Year Remote Work

• Pro-rate expenses for months worked from home
• Simplified method: Count only WFH days
• Detailed method: Annual expenses × (WFH months ÷ 12)

Multiple Jobs

• Can claim for each job if eligible
• Need T2200 from each employer
• Be reasonable in allocations

Hybrid Work

• Can claim for days worked from home
• Simplified: $2 × actual home days
• Detailed: May need to adjust calculations

Record Keeping

What to Keep

• Signed T2200 or T2200S
• All expense receipts
• Lease agreement (for rent)
• Utility bills
• Internet bills
• Home measurements
• Calendar of days worked from home

How Long to Keep

• 6 years from end of tax year
• CRA may request at any time

Which Method Is Better?