Work from home?
This tax season, take advantage of Canada’s home office rebate
The percentage of Canada’s labour force that works mostly from home has increased nearly eightfold since the spring of 2020.1 If you belong to this group of people, you’ve likely noticed that while you are spending far less money on transportation costs, your monthly bills have increased. Spending an additional eight to 12 hours per day at home – with the lights on, heat up, computer plugged in and increased internet usage – has increased your monthly utility bill.
Did you know all Canadians who worked more than 50% of the time from home for a period of at least four consecutive weeks in 2021 due to the COVID-19 pandemic can claim $2 for each day, up to a maximum of $500? If your home doubled as your office last year, be sure to take advantage of the Canada Revenue Agency’s deduction opportunity this tax season.
Who is eligible for a tax rebate? Anyone who spent at least 50 per cent of their full- or part-time hours working from home for at least four consecutive weeks last year qualifies.
How does it work? There are two options for employees: The temporary flat rate method and the detailed method.
The temporary flat rate method allows anyone who meets the eligibility criteria to easily apply for a $500 maximum rebate, provided they are not claiming any other work-related expenses on their tax return (i.e. motor vehicle expenses), and have not already been reimbursed by their employer. This method is only valid for 2020 (max. $400), 2021 and 2022. There is a simple form you can fill out to make the claim, and your employer will not have to sign off on anything.
The detailed method is more complex in that you will have to calculate the square footage of your home office and submit receipts to support your claim, including for heating, water, electricity, internet, phone, etc. Your employer will also have to complete as part of this method. However, you may be eligible for a tax return greater than $500. If you are claiming other work-related expenses, this may be the right option for you.
Consult this page of the CRA’s website to help you determine which method is best for you.