COVID-19, remote work has been becoming increasingly prevalent in most countries. They mostly use time-tracking software like Controlio and other methods to track their employees. The Canada Revenue Agency (CRA) has introduced rules and guidelines that can address the unique opportunities and challenges of remote workers. Whether you are new to remote work or are a seasoned remote worker, understanding these regulations is critical for your compliance and also for maximizing your benefits.
What the employees must know regarding CRA rules for remote workers?
The CRA remote work policy is primarily focused on deductions, taxation, and the
eligibility criteria for different remote work-related claims. Here is everything that you need to know.
Home office expense deductions
Under the home office expense deduction, you can use two methods for claiming the expenses.
Flat rate method
- In this method, you can easily claim a flat rate of two dollars each day for every day that you have worked from home. The maximum limit of this option is $500 a year.
- The best part about this method is that no receipt or signed T2200 form is needed.
- You are eligible for this, if you have worked from home for more than 50% of your time and at least four consecutive weeks because of COVID-19.
- In this, you can ask for the utilities, office supplies, and the internal bill.
- Expenses may increase or decrease depending on the section of your home that is being used for work.
Eligibility
To be eligible for deductions, you must meet the following criteria.
- You must have worked from home because of the pandemic or other requests from your employer.
- You should have a work section in your home where you will perform your job more than 50% of the time or you use that exclusively for earning your employment income and you regularly meet your customers or clients in that space.
Expenses That Can Be Claimed
The CRA has specified the types of expenses that can be claimed under the detailed method. These include:
- Electricity, heating, water, and a portion of home internet access fees.
- Stationery, pens, paper, and printer ink.
- Costs related to the upkeep of your workspace.
- A portion of rent for tenants (mortgage payments are not eligible).
Tax Implications and Filing
When filing your taxes, ensure you:
- Use the T777S form if using the flat rate method, and the T777 form for the detailed method.
- Retain all receipts and supporting documents for at least six years in case the CRA requests verification.
- If you’re unsure about any aspect of the new rules or how to apply them, consider consulting a tax professional for personalized advice.
Conclusion
The CRA’s new rules for remote workers provide valuable opportunities for employees to claim home office expenses and reduce their tax burden. By understanding these rules and diligently tracking your expenses, you can ensure compliance and make the most of the available deductions. As remote work continues to shape the future of employment, staying informed and proactive will help you navigate the complexities of remote work taxation with confidence.
