CRA Releases Details on Work from Home Expense Deductions and Benefits

  • January 17, 2021
  • Kevin Yip, Devon LaBuik, and Kathryn Walker

On December 15, the Canada Revenue Agency (the “CRA”) released additional details regarding the availability of employee deductions for work from home expenses and the taxation of certain employer provided employee benefits during the COVID-19 pandemic.

These new rules are a welcome relief and provide clarity for many employers and employees already grappling with a tough 2020 due to the pandemic. There were many questions and concerns as to how the existing employee home office expense deduction rules would work in 2020 with many employees (nearly all in some industries) working from home. For example, there was some uncertainty as to how to apply the condition that an employee be required to work principally from home in order to claim the home office deduction. Furthermore, from the employer’s perspective, the requirement to file Form T2200 for a significant number of its employees working from home seemed unnecessarily onerous.

Similarly, the social distancing and other health measures put in place by the public health authorities meant that normal commuting and work routines were disrupted. In order to address these concerns, the CRA provided some additional relief with respect to the taxation of certain employee benefits during the COVID-19 pandemic in order to mitigate some of the extra costs associated with traveling to work safely.