2020 was a rollercoaster of a year where Covid19 pandemic has pushed most of us working in tech to work from home.
The good thing is that your commute got much shorter, the bad news? The expenses started piling up – you had to upgrade your internet, get a bigger computer screen and get that ergonomic chair.
Canadian government was great to help out with emergency subsidies but here is another subsidy that not many people know about.
$400 Tax Benefit
The CRA (Canada Revenue Agency) has introduced this year a $400 tax benefit if you have been working from home. You can claim it on your 2020 income tax return. Please note, this is NOT $400 free cash, but $400 you can apply against your total income to reduce your taxes.
The good thing about this tax break, you do not need to provide any paperwork for this deduction you just need to claim that you have worked from home to be eligible.
To simplify the process for both taxpayers and businesses, the CRA will allow employees working from home in 2020 due to COVID-19 with modest expenses to claim up to $400, based on the amount of time working from home, without the need to track detailed expenses, and will generally not request that people provide a signed form from their employers.
How To Qualify
There are 4 things you need to pass to qualify for this $400 tax deduction:
- You have worked more than 50% at home in 2020
- You had to work at home because of Covid19 pandemic
- You are only claiming home office expenses and nothing else
- Company where you work at did not reimburse you for the expenses
Your employer does not need to provide you with any forms. If you have more than $400 in your home office expenses, you can opt to ask your employer for a T2200 form. You can expense more that way but will need to fill out some paperwork.