CRA indicates that the principal place of performance test for the employee home office deduction need only be satisfied during COVID for part of the year

In its revised webpage dealing with home office expenses for employees, CRA indicates that employees can opt, for their 2020 year, to use a “flat rate method” for computing their s. 8(13) home office deduction in lieu of using the regular “detailed” method. Under this temporary method, they can claim $2 per day worked from home because of COVID (subject to a 4 week minimum) up to $400 maximum (i.e., 200 working days). The principal advantages are simplicity: no need to calculate the size of the work space or keep supporting documents, and no need for the employer to complete Form T2200S or Form T2200. In addition, multiple employed individuals living in the same home (e.g., two spouses and their stay-at-home child) can each claim the $400.

CRA also provides guidance on the application of the “detailed” s. 8(13) deduction method in the COVID context. S. 8(13)(a)(i) in most circumstances requires that the mooted home office be “the place where the individual principally performs the duties of the … employment.” CRA informs the employee that such individual will meet this test if:

• you worked from home in 2020 due to the COVID-19 pandemic or your employer required you to work from home
• you worked more than 50% of the time from home for a period of at least four consecutive weeks in 2020

In other words, the “principally” test does not have to be satisfied over the whole year (e.g., for over 50% of the working days in the year) and instead need only be satisfied for a continuous 4-week period. This might also inform the meaning of “the individual’s principal place of business” in s. 18(12)(a)(i), although CRA does not extend its commentary to that provision.

CRA further indicates that it will accept an electronic signature on the Form T2200S and Form T2200 (but only for the 2020 taxation year), and that it “has expanded the list of eligible expenses that can be claimed to include home internet access fees” (presumably, including after 2020).

No one is expecting the pandemic to end on January 1, so that CRA doubtless will be asked whether various of these positions will apply in 2021.

Neal Armstrong. Summary of CRA webpage on “Home office expenses for employees” (Date modified: 2020-12-15) under s. 8(13).