Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Whether an employer has reasonable grounds to issue a T2200 to an employee
Position: It is a question of fact to be determined upon a review of the circumstances.
Reasons: It is our opinion that XXXXXXXXXX would qualify for home office expenses and T2200s should be issued because:
July 27, 2005
Re: When to Issue T2200
This is in reply to your letter of April 1, 2005, concerning when an employer has reasonable grounds to issue a T2200 to an employee.
Specifically, you have indicated that the work XXXXXXXXXX.
A deduction for office space in the home expenses is allowed under subparagraphs 8(1)(i)(ii) and (iii) of the Income Tax Act (the "Act"). Generally, an employee in computing income for a taxation year, is allowed to deduct amounts paid for office rent, supplies and salary to an assistant or substitute. Subject to certification by the employer, these expenses are deductible provided the employee is required by contract of employment to supply and pay them.
Form T2200, Declaration of Employment, pursuant to Subsection 8(10) of the Act, is the prescribed form which must be signed by an employer certifying that the required conditions were met in order to claim deductions under paragraphs 8(1)(a), (f), (h), or (h.1), as well as subparagraphs 8(1)(ii) or (iii). Since the form is used for various types of expenses that may be claimed by an employee, some of the questions on the form may not be applicable to a particular situation.
Subsection 8(13) of the Act prohibits the deduction of office in the home expenses, unless the individual either principally performs the duties of the office or employment in the work space, or the work space is "used exclusively ... for the purpose of earning income from the office or employment and used on a regular and continuous basis for meeting customers or other persons in the ordinary course of performing the duties".
Ordinarily to show that the taxpayer is required by the contract of employment to pay home office expenses necessitates that there be an express requirement within the terms of a written contract of employment. Since the XXXXXXXXXX have such a requirement and they are provided equipment and services which enable them to work at home, it is our view that they qualify for a deduction for home office expenses and it is reasonable that XXXXXXXXXX issue them a completed T2200.
We trust this information is helpful.
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
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