Remote worker tax deductions – how much you can claim?

Over six million Canadians are expected to benefit from the streamlined process

Remote worker tax deductions – how much you can claim?

Employers in Canada no longer have to file T2200 forms to help new remote workers claim tax deductions during the pandemic, the Liberal government announced in its fall fiscal update.

More than six million Canadians have been forced to telecommute during the pandemic.

While work-related spending has fallen, those with “modest expenses” may claim up to $400, based on total number of hours worked from home, without having to “track detailed expenses”.

Read more: Should employees be taxed for working from home?

In most cases, the Canada Revenue Agency (CRA) won’t anymore ask taxpayers on a work-from-home status to present a form signed by their employer.

“Canadians working from home can already deduct certain home office expenses for tax purposes, but first-time claimants may not be familiar with the rules,” the government said.

The current claim process only adds to employers’ administrative burden of submitting information on behalf of qualified claimants while they are dealing with the “broader impacts of the pandemic”.

“This measure will help taxpayers access deductions they are entitled to receive and simplify the tax filing process,” the government said.

Details are still being ironed out but the CRA will provide additional information in the weeks ahead.

Read more: Is all-remote the future of work?

The Canadian Payroll Association (CPA), meanwhile, welcomed the change, saying the “herculean task” of T2200 filings would have cost employers countless hours and more than $194m collectively.

The decision shows the government is “listening to the needs of payroll professionals across Canada,” CPA President Peter Tzanetakis said.

“Since the beginning of the pandemic, there have more than 300 legislative changes impacting payroll professionals who have been working tirelessly to help deliver essential programs to Canadians.”

The process of eliminating the T2200 requirement for new telecommuting staff will purportedly enable employers to focus on “essential business needs” during the pandemic, he said.

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