The simplified method for tax deduction of your expenses related to teleworking disappears. This is therefore a return to the pre-pandemic situation: you can now only claim this deduction using the detailed method. However, your employer must still agree to give you the claim forms.
“We’re back to square one,” summarizes Natalie Hotte, practice manager at the Quebec Tax Training Center.
The simplified method introduced in 2020, during the pandemic, allowed you to claim a fixed rate of $2 for each day of working from home, up to $500. It is no longer possible to take advantage of it as of the 2023 tax year — this therefore applies to the income tax return that you must file by April 30.
The detailed method, which already existed before the pandemic, remains available. “However, there are criteria to be met to be eligible,” underlines M.me Hood. First, you must have worked primarily from home — that is, more than 50% of the time — or have a space in your home designated for work (for meeting clients, for example).
Forms that are a source of “friction”
Another essential element to claim this tax deduction: you must obtain forms TP-64.3 provincially and T2200 federally, duly completed by your employer.
“That’s where there can be friction. Because some employers may not provide their employees with the forms to the extent that they do not require teleworking,” underlines tax specialist Natalie Hotte. “If you don’t have the forms, there’s nothing your accountant can do. It’s really up to the taxpayer to take the steps and convince their employer,” she explains.
Note that the federal form specifies that teleworking “does not have to be part of the employee’s contract” and that a “written or verbal agreement” may be sufficient.
Manon Poirier, general director of the Order of Certified Human Resources Advisors of Quebec, recalls that “many employers have reduced their work spaces” since the pandemic and that they “do not have the physical capacity to accommodate all of their employees in the office at the same time.” As a result, “it makes it a requirement to be able to telework,” she notes.
Mme Poirier also believes that the eligibility criteria for the tax deduction should be reviewed. “Limiting this to those who are 50% teleworking is a bit of ignoring recent changes in the job market, because many people today work three days out of five in the office and are therefore deprived of the deduction” , she emphasizes.
According to Statistics Canada data, only 7% of Canadians worked from home most of the time in January 2020. This proportion quickly increased to 41% in April 2020 due to COVID. Since then, the use of teleworking has declined significantly, but it remains popular. Last November, one in five people (20%) worked from home most of the time.
How the method works in detail
If you qualify for the tax deduction for telecommuting expenses and your employer gives you the forms, you can move forward with the claim.
“The expenses must not have been reimbursed by your employer,” recalls tax specialist Natalie Hotte. Among these eligible expenses – for which you will need to gather your supporting documents – there are in particular your bills for electricity, heating, water or even Internet access costs. However, they are not completely covered. You will need to calculate the portion that is actually devoted to work, that is to say according to the size of your office space in relation to the size of your home (or in proportion to the hours spent working if you do not you don’t have a space dedicated to this use).
The Canada Revenue Agency summarizes the procedure, step by step, on its website.