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What telework employment expenses can you deduct from your taxes?

April 20, 2021
What telework employment expenses can you deduct from your taxes?

Telework is now a part of our daily lives. In the past year, it has become a fact of life for many people. But how does that impact your taxes? How do you enter telework employment expenses in your tax return? How does telework potentially impact your tax refund?

The current situation is raising numerous questions for workers, such as:

  • What expenses can I deduct?
  • I get a refund for work supplies I purchased?
  • Can I deduct my internet plan?
  • Etc.

What are the two conditions you need to meet?

  • You have to have worked from home more than 50% of the time for at least four consecutive weeks in 2020 due to the COVID-19 pandemic;
  • Your employer has not reimbursed any expenses.

You can deduct home office expenses, such as supplies (paper, ink cartridges) and computer equipment, internet use, etc.

Prior to this year, your employer had to provide completed forms T2200 and TP64.3 (declaration of conditions of employment) for you to claim employment expenses. Taxpayers who use the detailed method still need to use these forms. This year, however, the tax authorities have introduced a simplified and temporary flat-rate method for taxpayers who have few expenses for working from home.

What is the difference between the two methods?

Under the temporary flat rate method, you can claim $2 per day of telework for a maximum of 200 days, that is, a total deduction of $400. With this method, you do not need a form from your employer or supporting documents. This method applies for both federal and provincial purposes, for a total deduction of $800.

The second, or detailed method, could be beneficial for tenants, for example.

If the space used to work at home represents a large percentage of the total area of your home, the detailed method will probably be the most advantageous for you. With this method, teleworkers can claim a reasonable proportion of the actual costs they paid for the use of a home office space.

In order to use this method, you must work more than 50% of time from home, in a location that is considered your work space. You must also have received forms T2200S (federal) and TP-64.3 (provincial) completed and signed by your employer.

You must provide details of your expenses. Be careful, not all expenses qualify. Generally, the following expenses qualify.

Salaried and commission employees:

  • Electricity;
  • Heat;
  • Water
  • Office supplies;
  • Internet access fees;
  • Minor maintenance and repairs;
  • Rent (tenants only).

Commission employees only:

  • Home insurance;
  • Property taxes;
  • Equipment rental (telephone, computer, tablet) that reasonably relates to earning commission income.

Expenses that are not eligible for anyone:

  • Mortgage interest;
  • Mortgage payments;
  • Home internet connection fees;
  • Furniture;
  • Capital expenses;
  • Wall decorations.

IMPORTANT: Keep all receipts and supporting documents for six years. The tax authorities could ask for them.

What method should I use?

We recommend you do the online simulation. This will help you determine which method is most advantageous for you.

Click on the links below to use the calculator:

Revenu Québec: Choose the method of calculating teleworking expenses that is the most advantageous for you (gouv.qc.ca).

Canada Revenue Agency: Home office expenses for employees – Canada.ca.