“This measure will assist taxpayers entry deductions they’re entitled to obtain and simplify the tax submitting course of,” the financial assertion mentioned.
“They’re attempting to place in a simplified system,” mentioned Jamie Golombek, managing director of tax and property planning with CIBC Monetary Planning & Recommendation. “So somewhat than including up all of your bills, and dividing by what number of sq. toes, and what number of days or months you’re working from residence, [the government will] allow you to write off $400. You don’t must maintain any receipts; there’s no detailed monitoring required.”
Underneath present guidelines within the Revenue Tax Act, staff working from residence can declare sure eligible residence bills, reminiscent of heating gas, provides, utilities, repairs and upkeep prices in respect of a house workplace. These bills must be allotted in the identical proportion that the workspace occupies in a house. In an effort to declare these bills, an worker will need to have their employer full and signal Type T2200: Declaration of Situations of Employment, which attests that the worker was required to work at home.
Taxpayers will nonetheless be capable to declare beneath the present guidelines in the event that they select, Golombek mentioned.
“If somebody is in a 450-square foot condominium, and so they’re utilizing half the condominium for work half the time, and so they’re paying hire, that may very well be an infinite quantity of residence workplace bills [that can be claimed].”
The proposal within the authorities’s fall financial assertion is meant to offer an easier course of to assert residence workplace bills, whereas addressing points that might be raised if thousands and thousands of Canadians now working from residence requested their employers to finish and signal the T2200 kind. The Division of Finance and the Canadian enterprise and tax neighborhood have consulted in latest months on how the method is perhaps expedited.
“Canadians working from residence can already deduct sure residence workplace bills for tax functions, however first-time claimants might not be accustomed to the foundations,” the financial assertion mentioned, “and the declare course of imposes an administrative burden on employers who’re already coping with the broader impacts of the pandemic and must fill out extra info for his or her staff who qualify.”
The federal government mentioned that additional particulars in regards to the course of will probably be communicated by the CRA within the coming weeks.