Here's how to save money on your taxes in Canada if you work from home
Work from home tax credits in Canada are what you'll need to know about if you work more than 50 per cent of the time from home for a period of at least four consecutive weeks due to lockdowns in 2020, 2021, or 2022?
If so, then you may be eligible to receive up to a $500 tax deduction through Canada's temporary flat rate method home office expenses claim.
This method means you don't have to actually calculate the size of your workspace, or keep supporting documents, and your employer doesn't have to complete and sign certain tax forms.
In order to use this method to claim the home offices expenses you paid, you must meet all of the following criteria:
Next, you must count the total number of days you worked from home in the year due to the pandemic and multiply that by $2 per day. You can also claim any additional days you worked at home during the year due to lockdowns.
The maximum amount that can be claimed is $400 per individual in 2020, and $500 per individual in 2021 and 2022.
Use "Option 1 - Temporary flat rate method" on Form T777S to enter these amounts and attach it to your income tax return for the year.
Then, claim the deduction by entering the amount from line 9939 on Form T777S to line 22900 "Other employment expenses" on your income tax return.
The government of Canada also provides a detailed guide on how to claim the deduction through the temporary flat rate method on their website.
Another option is to follow the detailed method, which allows you to claim the actual amounts you paid, supported by documents.
You must complete Form T777S or Form T777 and get a completed and signed Form T2200S or Form T2200 from your employer.
Although it's possible that the detailed method could result in a greater tax deduction, it requires more time and effort to complete.
The government of Canada also provides a detailed guide on how to claim the deduction through the detailed method on their website.
To claim the actual expenses you paid for working from home through the detailed method, you must meet all of the following conditions:
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