October 26, 2022
Speaking notes

• 1. T2200 for Employers

  Hello and welcome to Form T2200 - Declaration of Conditions of Employment, a form for Employers.

  I’m Matthew, your host for today.

• 2. Introduction – T2200 for Employers

  For today, please click on the question icon in the tool bar at the top of the screen to ask a question related to the T2200 form for employers.

  We’ll answer as many as we can during the webinar.

  For any other tax related questions, call the business enquiries line.

  Let’s get started.

• 3. Outline

  If you are an employer who requires that employees pay for their expenses, for example, expenses related to working from home while carrying out their duties of employment, then this webinar may be of interest to you. The T2200 form is specifically designed for employees who are required to take on the financial burden of specific unreimbursed expenses through the course of doing their jobs.

  Today, we’ll talk about:

  • Common misunderstandings regarding the Form T2200
  • What the T2200 form is used for
  • How to fill out the form
  • Employer obligations regarding the form
  • Understanding how your business fits the wide variety of options that may be addressed in the form

• 4. Context

  At the end of this webinar, we say that tax administration is as complex as life itself.

  It is confirmed by the increase of pages in the Income Tax Act with more than 2000 pages from when the Act was introduced about 100 years ago.

  And it is borne out with the FormT2200, a single form that accounts for a multitude of employer-employee situations relating to conditions of employment to deduct work-related expenses.

• 5. Misunderstandings

  First though, let's clear up some misunderstandings.

  For example, we’ve heard that:

  The Form T2200 certifies that an employee must maintain an office space as demanded by an employer.

  This is false.

  The Form T2200 actually certifies that the employee is required by their contract of employment to use a portion of their home for work by answering yes to question number 10.

• 6. Misunderstandings (con't)

  We’ve also heard that employees must submit all their receipts with the Form T2200.

  False.

  The expenses receipts must be kept as records but not sent in.

  Another misunderstanding is that the Form T2200 is used to account for expenses that are more than $500.

  False.

  The Form T2200 must be signed by the employer if the employee wants to claim employment expenses using the detailed method regardless of the amount claimed.

• 7. Misunderstandings (con't)

  The Form T2200S, is a form only for employees who worked from their home in 2022 due to COVID-19.

  We’ve heard that the Form T2200S covers the flat rate method of claiming home office expenses.

  This is false.

  When using the flat rate method no declaration of condition of employment form is required. To claim using the flat rate method use form T777S.

  We’ve also heard that the Form T2200S did not require a signature from the employer.

  This is false.

  The T2200S also requires a signature.

  Another perceived difference between the Forms T2200 and T2200S is that records do not need to be maintained.

  This is also false.

  Both forms required keeping records.

• 8. Misunderstandings (con't)

  Another misunderstanding is that only the Form T2200 must be completed for the detailed method of claiming expenses.

  Not true.

  Either the Form T2200 or the T2200S form must be used for the detailed method.

  Form Form T2200 is a form the employer fills out to certify the conditions of employment and that the employee was required to payfor employment expenses.

  Form Form T2200S is a shorter version that will be used again for the 2022 tax year and filled out and signed by the employer to certify that the employee worked from home due to the COVID-19 pandemic and that the employee was required to pay for some or all of their home office expenses used directly in their work while carrying out their duties of employment during a period.

• 9. Common Mistakes & Confusion

  In filling out Form T2200, employers often make mistakes:

  We find that these mistakes are often a matter of not supplying enough details to support your answer to the question or contradictions with the interpretation of the conditions of employment.

  We’ve also heard through webinar feedback that employers are sometimes confused about the requirement to fill out the T2200 form.

  So let’s get to it.

• 10. Who is involved

  The employer fills out the T2200 form

  to confirm the conditions of employment of their employee, guided by 13 questions within the form.

  Questions 11, 12 and 13 could require the employee’s assistance to provide a list of itemized tools when working as a tradesperson, an apprentice mechanic or in the forestry operations.

  The employer must sign the form and provide the signed, dated and completed form to the employee.

• 11. Let’s break it down

  The form has a preamble, split in two parts.

  • It states that the employer must complete the form so that an employee can deduct employment expenses from income. Without this attestation, an employee wishing to claim expenses will not be able to do so.
  • It informs the employee not to file the form with their return but to keep it should CRA wish to see it.

  It refers to Guide T4044 -Employment Expenses, which contains lots of information on eligible expenses for employees.

• 12. Identification

  Part A of the form gathers

  employee information, namely:

  • The last and first name.
  • The tax year covered.
  • The employer address.
  • The job title of the employee and a brief description of duties.

  The description of duties must provide sufficient information for a person outside of the business to understand the employee’s job duties.

  For example, sales representative - Meets clients at their home to sell products and services.”

• 13. Question 1

  The first question to part B is the most important. Respond to this question first, because if you answer no, the employee is not entitled to any deductions and the employer does not have to fill out the form.

• 14. Question 2

  If an employee is required to travel within a territory to visit clients then the territory for which the employee is responsible must be identified.

  Employers should note that, if the answer is Yes to this condition, they must describe the specific area of travel.

  A common mistake is that an employer will say "yes" and not provide the details of travel.

  The areas of travel need to be clearly identified. The exact route and the addresses of each destination is not required. The description of duties could be a general geographic area, city or municipality, routine travel between two cities/towns/municipalities, or routine travel throughout a province, and will give CRA an idea of the scope of the required travel.

  For example, Eastern district – visits facilities in Ontario and Quebec.”

• 15. Question 3

  If the employee must be away for at least 12 consecutive hours from the municipality and metropolitan area of the business where the employee normally reports for work, the frequency of that requirement must be noted to allow for meals and lodging expenses.

  If the answer is yes to this condition, please indicate the frequency.

  A common mistake is that an employer will answer yes and not indicate how often remote work occurs.

• 16. Question 4

  The duration of employment covers permanent and part-time employees and any leaves of absence.

  Where there are breaks in employment, these should be specified, so that expenses mistakenly claimed in those periods are disallowed.

  Generally, a break in employment means an interruption in employment and includes situations where employment ends: for example, when the employee leaves, seasonal lay off or any other situation that would cause an employee to not be on the payroll.

  If additional space is required, use a separate sheet to enter the additional information as long as it clearly indicates the questions it is related to and it is signed by the same authorized individual that signed the T2200 form.

• 17. Question 5

  CRA wants to know if the employer gave the employee a motor vehicle allowance, or a company car.

  Two kinds of allowances are noted as options:

  • a fixed allowance amount received
  • a per kilometre rate and amount received

  Also required was the amount included on the employee's T4. If the employee had use of a company car, was the employee responsible for any of the expenses?

  • If yes, you must indicate the amount and type of expense.
  • It may be that some classes of employees, say sales or service, could make expense claims.

  Tailoring each Form T2200 to an individual employee or class of employees makes a difference to what can be claimed as expenses.

• 18. Question 6

  Question six and seven record reimbursements.

  For question six, the amount and type of expense must be indicated if the employee was reimbursed for expenses, and note whether the reimbursements were included on the employee’s T4.

  Reimbursements could be a cash back or a charge to the employer.

• 19. Question 7

  This question denotes any required expense types for which the employee did not receive reimbursement or allowance.

  It enables employers to list expenses that you require the employee to pay to perform their employment duties that are not covered by the remainder of this form.

  That said, not all expenses are deductible under the provisions of Section 8. It is the employee’s duty to verify if the expenses are deductible and if they meet the requirements to claim those expenses using the information available on Canada.ca, such as Guide T4044, Employment expenses.

  For example: licences such as real estate and insurance salespeople annual licences, bonding premiums,or any other expenses that the employer does not reimburse.

  Those fees are often paid by the employee and do not always affect the contracted fees for service or salary.

• 20. Question 8

  Here, any commission-based sales are recorded as well as the commissions paid and the type of business conducted.

  Also noted is any special business development type account from which employee expenses are paid, and whether any income from that account is included in box 14 of the employee's T4.

• 21. Question 9

  There are up to four kinds of required expenses that apply:

  • An office outside of the work place
  • Direct hiring of any assistants
  • Supplies that are directly used for work
  • The use of a cell phone

  You must also provide the amount and type of any reimbursement payment for those expenses, and indicate whether these payments are included on a T4 slip.

  A common mistake made by employers is when the details of the answer to this question contradicts some of the information provided to question 7:

  • In question 7, some employers would indicate that the employee is required to pay for supplies and cell phones for which they did not receive any allowance or reimbursement
  • In question 9, some employers have answered no to supplies and to cell phones.

  This creates confusion for the employee's expense claims: are supplies and cell phones required or not?

• 22. Question 10

  In question 10, the employer is asked whether an employee was required to use a portion of their home as a work space or office.

  The employer will be asked to indicate the percentage of work done at the home office.

  Acknowledge any reimbursement for work-at-home expenses, indicating the amount and type, and whether the amounts were included on a T4.

• 23. Question 11

  Questions 11 through 13 deal with three very specific types of employees.

  Question eleven deals with tradespersons.

  • If the employee is a tradesperson, do you require that employee to provide tools used directly for work?
  • Are all the tools listed by the employee required for the work?

  The employer signs and dates the list of tools provided by the employee upon approval.

• 24. Question 12

  Question 12 deals with apprentice mechanics.

  These are the sub-questions asked:

  • Was the employee enrolled in an official program in Canada leading to a lawful designation as a licensed mechanic who can repair self-propelled motorized vehicles?
  • Do you require that employee to provide tools used directly for work?
  • Are all the tools noted by the employee required for the work?

  The employer signs and dates the list of tools provided by the employee upon approval.

• 25. Question 13

  Question 13 deals with forestry employees.

  There are two sub-questions:

  • Was the employee involved in forestry operations?
  • Was the employee required to provide a power saw and/or variants?

• 26. Declaration

  The employer is asked to provide their name and signature in this box and contact details if CRA wishes to verify or requests additional information.

  The employer declares that the information on the form is true.

  The employer must ensure to have part A and part B as well as the declaration with date and signature fully completed before giving the form to the employee.

• 27. Employee signature

  The employee also signs the form, provides their home address and social insurance number.

  Don’t forget that it is easy and convenient to fill out this form online at the Canada.ca page. CRA accepts electronic signatures.

  When completed by both parties, the employer and employee, the form should be in a format that cannot be altered such as a pdf.

• 28. Recap

  Today, we discussed:

  • Common misunderstandings regarding Form T2200
  • What the T2200 form is used for
  • How to fill out the form
  • Employer obligations regarding the form

  Understanding how your business fits the wide variety of options that may be addressed in the form

• 29. Thanks!

  Tax administration is as complex as life itself. If the content today doesn’t quite fit your situation, please:

  • Visit our web site.
  • Visit Canada.ca/cra-liaison-officer to get free tax help from a liaison officer.
  • Call CRA’s business enquiries line at 1-800-959-5525.
  • You can also go to canada.ca/cra-videos where you’ll find all our business webinars.

  We’ve come to the end of our webinar. Please click on the survey icon in the tool bar at the top of the screen to fill out the evaluation form for this webinar.

  Thanks for joining me today. I hope it’s been helpful. Stay tuned for more webinars in the coming months! Good bye.