What You Can and Cannot Claim From Your Work-From-Home Office

In 2020, many Canadians had to hastily set up a home office and get used to working in their pajamas, and this means that the way you do your taxes may be different this year. Of course you still have plenty of time to pay the taxman but if you’re working from home, it’s a good idea to have an idea of how this will impact your tax return.

If you’re self-employed, nothing’s changed and you need to file your income tax return as usual. If you’ve been working from home because of the pandemic, just for this tax year, the Canada Revenue Agency – or CRA – has introduced a temporary flat rate method where you can claim $2 a day, up to $400, if you meet certain criteria. Otherwise, you need to use the detailed method. First, you need your employer to sign a T2200S form to show that you worked from home and had to pay your own home office expenses. Before filing, you should check with the CRA for the latest information but for now, here’s what you can and cannot claim from your work-from-home office if you use the detailed method.

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Utilities: Yes

Working from home, you may have seen an increase in your electricity, heat and water usage. If you live in one of the most expensive places in Canada, paying even more for pricey utilities can really eat into your budget. However, you can claim a portion of your utilities and even of the utilities portion of your condominium fees.

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Internet: Yes and No

For those of us who have been working from home, the internet has been essential. However, the CRA sees it in a different way. So, you can claim your monthly home internet access fee – as long as the cost of the plan is reasonable. However, you can’t claim for the lease of the modem or router and you can’t claim connection fees.

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Maintenance and Minor Repairs: Yes

Not getting rid of distractions is one of the biggest work-from-home mistakes to avoid. These include that flickering lightbulb or that chip in the wall where they installed your brand-new office equipment. You can claim the cost of these minor repairs and maintenance for your workspace. For maintenance and minor repairs that involve your workspace as well as other areas of your home – fixing the furnace, for instance – you can claim the percentage that applies to your workspace.

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Capital Expenses: No

Capital expenses are those related to making more permanent changes to your home. Changing a lightbulb or painting a wall is considered maintenance but replacing your windows or flooring or knocking out a wall would fall under capital expenses. You cannot claim for these. So, before you commission that interior designer – who has one of the highest-paying in-demand jobs in Canada – to give your workspace a total makeover, consider that this won’t count as a tax write-off.

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Rent: Yes

If you rent your home or apartment, you can claim for the portion of the rent that covers your workspace. To determine this, you need to measure the size of your home, the size of the area that you use as your workspace and then determine the percentage of your home’s total area that you use as your workspace. If your partner or roommate works from home too, they need to determine the area that they use as workspace, to claim on their own tax returns.

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Mortgage: No

You may be lucky enough to be able to own your home. Unfortunately, you can’t claim your mortgage, or even a percentage thereof, for working from home. This goes for the principal mortgage payments as well as mortgage interest. Hopefully you’ve figured out how to how to get the best mortgage rate when buying your home, then.

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Furniture: No

Furniture is one of the things Canadians spend a lot money on. Setting up your home office, you’ve probably had to fork out for a desk, a decent chair, maybe even a filing cabinet. Hopefully however, you haven’t gone for the most expensive designer furniture unless you really can afford it, since you can’t claim for furniture on your tax return.

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Wall Decorations: No

If you want to give colour to your work-from-home office by adding a painting from that community art project you support, your motivation should be your altruistic support of social justice and the arts rather than the tax benefits. After all, you can’t claim for wall decorations for your workspace.

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Office Supplies: Yes and No

If your employer expects you to cover the costs of the office supplies you need to do your job from home, you may be able to claim for some of them – or at least for the portion of the expense you use for work. You can claim for items like envelopes and postage stamps, pens and pencils, sticky notes, paper, notebooks and paperclips – things similar to the back-to-school supplies you should buy at the dollar store. You can’t claim for things like computers and computer-related equipment, software, printers and scanners, houseplants or the coffee machine.

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Phone: Yes and No

All those work-related phone calls you need to make? You can claim for them if they’re long-distance calls and you can show the actual minutes or data you used. You can also claim for a basic cellular plan if the cost is reasonable and you use a reasonable portion of the plan for work rather than personal calls. However, you can’t claim for a monthly basic home landline rate or for the cost of your cellphone, its connection or licence fees or protection plans.