15 June 1992 Administrative Letter 9214436 F - Use Of T2200 By Employee For Office In Home

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.

June 15, 1992

T1 Programs DivisionBusiness and General DivisionAssessment of Returns Directorate

Attention: Michelle Desmarais-Markham

Office in Home Expense for Employees

This is in reply to your memorandum dated May 7, 1992 concerning the interaction of paragraphs 8(1)(f) and 8(1)(i) and subsections 8(10) and 8(13) of the Income Tax Act.

While the general intent of the provisions as a whole seems quite clear, the question has been raised as to whether form T2200 (as prescribed pursuant to subsection 8(10) of the Act) is required to be filed for expenses claimed in respect of an office situated in the employee's self contained domestic establishment.  It is your view that the office in home expenses are claimed under paragraph 8(1)(f) or (i) of the Act and that thus the form is required.

An argument has been raised as to why the form might not be required and is based on the use of the word "notwithstanding" in subsection 8(13) without the use of a modifying phrase referring to the provision permitting the deduction such as is used in subsection 8(5) of the Act "...dues are not deductible thereunder...".  It has been suggested that subsection 8(13) stands on its own and an employee who meets the conditions set out in that subsection need not submit the form certified by the employer. Notwithstanding the use of the word "notwithstanding" in subsection 8(13) of the Act, it is our view that an employee cannot claim a deduction for expenses incurred in the current year for maintaining an office in the home unless the employee also meets the conditions set out in either paragraph 8(1)(f) or (i) and in subsection 8(10) for the reasons set out below. 

Paragraphs 8(13)(a) and (b) do not permit an employee to claim a deduction for office in home expenses but rather operate to restrict the deduction in respect of an amount which would otherwise be deductible under either paragraph 8(1)(f) or 8(1)(i) of the Act.  Paragraph 8(13)(c), on the other hand, deems an amount to be deductible and provides the authority for the deduction thereof subject to paragraph 8(13)(b) of the Act.  Consequently, it is our view that an employee is required to submit the form for current year expenses which are deductible under paragraph 8(1)(f) or (i) and are not denied by reason of paragraph 8(13)(a) of the Act.  However, the employee would not be required to submit a form in subsequent years for expenses claimed under paragraph 8(13)(c) which were denied in prior years by reason of paragraph 8(13)(b) since the expenses which are carried forward would have met all the criteria for a deduction in the prior year except for that of paragraph 8(13)(b) of the Act.

                           21(1)(b)

B.W. DathDirector Business and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

c.c. Client Assistance Directoratec.c. Current Amendments and Regulations