Businesses and their employees have incurred a lot of new costs in the sudden transition to so many people working from home this year. But the government has offered some new tax deductions to help offset those costs.

Deduct Away!

In the federal government’s Fall Economic Statement they announced a new, simplified tax deduction for all those unexpectedly working from home due to the pandemic. The CRA will allow WFH employees up to $400 in expenses, without needing to provide documentation. Previously employers had to fill out a Form T2200 for each employee that claimed home expenses, but this deduction was specifically designed to reduce the administrative burden all these new WFH expenses would place on businesses, especially at tax time.

In addition to things like office supplies, employees can claim portions of their phone and internet bills, and even part of their rent (but not part of their mortgage).

Reimburse from the Office’s Purse

While employees can’t claim items classified as capital costs—things like laptops, office chairs or desks—employers can reimburse up to $500 worth of equipment per employee, tax-free. In a recent expansion of the rule, this applies not only to computer equipment but office furniture including desks and office chairs as well.

There are inevitable expenses to having a huge chunk of the workforce move to remote work and the government is doing what it can to soften that burden on Canadians.

NOTE: These rules are both quite recent and the CRA will be releasing more details later. We’ll update this blog as that information becomes available.