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Taxes 2024: Work from home? Here's how to file your expenses this year

Woman sitting on a desk using a laptop computer while working from home. Business, freelance and home office concept.
If you spent most of last year working from home, you could be eligible for a tax deduction – but the process is more complicated compared to previous years. (Getty Images) (COROIMAGE via Getty Images)

If you work from home and are hoping to deduct some of your office expenses from your 2023 taxes, your filing just got a bit more complicated.

This year, the Canada Revenue Agency (CRA) changed the process for filing expenses related to working from home. During the COVID-19 pandemic, the government introduced a temporary flat-rate method that simplified the filing process and allowed people to file a claim without having to provide receipts and calculate home office expenses.

But that temporary flat-rate method is no longer in place, and the 2023 filing will require more work on the taxpayers' part.

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“It’s more onerous, for sure, because you can’t just use the flat-rate method,” Dentons partner Gergely Hegedus said in an interview with Yahoo Finance Canada.

“Employees will have to spend more time collecting the information and their receipts to claim expenses.”

Here’s what the process is going to look like this year.

Determine if you are eligible to claim home office expenses

The first step is determining whether you are eligible to claim home office expenses on your taxes.

In order to claim home office expenses, you must be required to work from home by your employer. The CRA has said the requirement does not have to be part of your employment contract, but it should be a written or verbal agreement. If you voluntarily reached an agreement with your employer to work from home, the CRA considers you to be required to work from home.

That means hybrid work arrangements could qualify, but only if you are working from home for a certain period of time.

“If you have an arrangement where you work from home, even though it’s not mandatory, and you work from home more than 50 per cent of the time, you’d be eligible,” Hegedus said.

You can qualify to deduct home office expenses if you use your home office for more than 50 per cent of a time period, for at least four consecutive weeks. The CRA says you can also qualify if you only use your work space for employment income, by using it regularly and continually for in-person meetings with clients, customers or other people while working.

Get your employer to fill out a T2200 form

This year, the CRA requires that you have a completed and signed T2200 form from your employer. The form must be completed by employers in order for workers to deduct expenses from their income. Employers can fill out the form electronically.

“If the CRA audits you and you don’t have that form, there’s a good chance they’ll deny those expenses,” Hegedus said.

“Having the form is a condition to claiming your home office expenses.”

Calculate the size of your workspace

Once you confirm that you qualify for home office expenses and have requested the T2200 form from your employer, it’s time to calculate the size of your workspace.

“You will need to determine the size and use (employment and personal) of your workspace to calculate your claim for work-space-in-the-home expenses,” the CRA says.

The CRA has an online guide and calculator to help you determine the percentage of your home that is used for your workspace. You’ll need to know the size of your workspace and the size of your home. If you are using a common space, such as a dining table, as your office, you’ll need to determine the size of the workspace as a percentage of the entire home, and multiply it by the number of hours worked in that space (as a percentage of the week.)

Get your receipts in order – and hold onto them after you file

Once you know the size of and time spent in your office space, you need to sort out what expenses you can actually claim.

“You actually have to calculate your actual work-from-home expenses. You're going to have to add up all your utilities and things like that, and then pro-rate it based on the space that you use for work divided by the rest of your home,” CIBC's managing director of tax and estate planning Jamie Golombek said in an interview with Yahoo Finance Canada.

“(If) it's a shared space, you’ve got to divide it by the number of hours you spend, let's say at the kitchen table, working versus eating."

Some people can "effectively write off a portion of their home, if they use it for work."

The CRA says all salaried and commission employees can claim electricity, heat, water, utilities portion of condominium fees, home internet access fees, maintenance and minor repair costs and rent. Commission employees can also claim home insurance, property taxes and the lease of cell phones, computers and tablets that “reasonably relate” to earning your income. You cannot claim mortgage interest, principal mortgage payments, home internet connection fees, furniture, capital expenses (such as replacing windows or flooring) and wall decorations.

Hegedus advises that employees have receipts ready after they file.

“Keep your monthly utility bills, internet fees, those records in case you get audited,” he said.

With files from Jeff Lagerquist.

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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