Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC's Today show as well as Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier. In his spare time, he hosts “The Originals" podcast.
If you’re an employee who works from home (and not due to COVID-19) and hope to deduct work expenses, you’ll absolutely need your employer to provide Form T2200. This quick guide will provide all the essential information on forms T2200 and T2200S you’ll need.Wealthsimple Tax is a simple way to file your taxes. File your return with confidence it’s done right, and pay what you want—there’s no catch.
Tax form T2200 explained
Form T2200 is provided by your employer and allows you to claim expenses you incur to perform your job, such as your home office, cell phone, car, professional advice, and other employment expenses.
But driving your car to the office every day and occasionally tapping out some work emails at your dining room table won’t get you a T2200, or, for that matter, a justification for a tax deduction on your car payment or rent from the Canada Revenue Agency (CRA). T2200 forms are sent to a very specific subset of workers who wouldn’t be able to do their jobs unless they take on the financial burden of specific unreimbursed expenses.
Form T2200, a three-page document that bears the title, “Declaration of Conditions of Employment,” is likely familiar to people who travel a lot for their jobs. In the world of expense deduction, the self-employed and business owners have many deductible expenses at their disposal, whereas salaried employees are more limited and must get a T2200 if they want to deduct certain expenses. (Jobs and “gigs” sometimes can seem similar, so the CRA actually created a pamphlet specifically to help you understand whether you are technically an employee or self-employed.)
Unless you are an employer, you likely won’t need to fill out the T2200 yourself. It’s something that most employers will complete automatically and deliver to you. Unlike, say, T4s which are filed with your income taxes, T2200s will only be provided to you, the employee.
Note that the Canada Revenue Agency won’t receive a copy of it. This doesn’t mean it’s not important. So if you receive a T2200, keep it in a safe, easily-accessed place. It’s one of those things that you’ll need if and when the CRA comes knocking for any supporting documentation based on your submitted tax return.
Possession of form T2200 opens the door for you to fill out form T777, which is where you’ll itemize your various deductible expenses. Unlike the T2200, you are required to send a completed copy of the T777 to the Canada Revenue Agency.
How important are T2200 forms? Super important, as illustrated by the tax saga of one Toronto worker, reported on by The Financial Post. The Canada Revenue Agency denied $4,013 of business-related expenses claimed by a film-industry lighting technician. The rejection left him so outraged that he went to court where a judge asked him to produce a T2200, which he didn’t have. The judge ruled that because his employer hadn’t sent him a T2200, and wasn’t required to for the kind of job he held, the fact that he didn’t get one was “fatal.”
If you are an employee and think that you might be entitled to deductions but did not receive a T2200, you may first want to review the CRA’s publication 4044, which provides a primer on what’s deductible and what’s not. (No, that $5,000 Brioni jacket is not deductible as “protective clothing.”)
If, after you acquaint yourself with the guidelines and feel you are entitled to a T2200 from your employer, reach out to your company’s human resources department.
What’s in the T2200
Besides an employee’s name, address, and social insurance number, the T2200 features just 13 questions. The most basic but important one indicates whether the employee is allowed to claim anything: “Did this employee’s contract require them to pay their own expenses while carrying out the duties of employment?” An answer of “no” to this question means the employee won’t be able to deduct any expenses at all.
Other questions ask whether the employee must travel to places other than the office as part of her job. Does the employee need to rent an office? Have a car? A business cell phone? Use part of their home as an office? Need to own a power saw? (A couple of the questions are quite specific.)
What to be careful about
Item 9 on the T2200 asks if the employer has reimbursed the employee for any expenses and how much. It’s especially important when completing your taxes that the amount the employer reimbursed you not be included in your deductible expenses. Claiming reimbursed expenses as a deduction is not allowed by the CRA.
There’s a very long list of deductible expenses, some as narrow as “musical instrument expenses.” Have a look at this T777 info to get the full picture of what might appear on your T2200.
The big ones that most T777 filers will be concerned with are automobile expenses, work-related entertaining, and office rent (or a portion of your total home expenses if you work from home regularly). Most queries you might have about home offices are covered in the CRA’s guide, “Work-space-in-the-home expenses.”
Frequently Asked Questions
Form T2200 is a form provided by your employer that allows you to claim eligible expenses incurred to perform your job, such as your home office, mobile phone, and car. Possession of form T2200 allows you to complete form T777, which is where you’ll itemize your various deductible expenses. Claiming these expenses provides deductions that ultimately lower your tax liability, keeping more money in your pocket.
You do not need to send a copy of T2200 to the CRA with your income tax and benefit return, but you should keep it on hand in case the CRA asks to see it
Form T2200 is for employees (regardless of job title) whose employers require them to pay expenses to earn employment income. It does not apply to self-employed people, nor does it apply if your employer reimbursed you for your expenses. You cannot deduct the cost of traveling to and from work, or expenses such as tools and clothing (which are considered personal).
If you switched to working remotely due to the COVID-19 pandemic, you may be eligible to deduct home office expenses, provided you worked more than 50% of your time from home for at least four consecutive weeks and the expenses were directly related to your work.
How much you get back from your employment expenses depends on the value of those expenses. When you claim an expense as a deduction, it lowers your taxable income. This does not mean that you receive the entire expense back as a credit. It just means you won’t pay taxes on that amount.
Form T2200 is simply your employer’s report of the expenses that commissioned employees incur. Once you have form T2200, you’ll need to complete and submit form T777 to itemize your deductions. T777 will reduce your income tax liability.
There is no clear legal obligation on the part of your employer to issue you a T2200 for your employment expenses (especially if your employer is a non-Canadian company) unless your work contract/agreement includes such a provision. If your employer refuses to issue a T2200, document your attempts to obtain it (including escalating to HR). Then file it unsigned with your return (as long as the expenses are eligible). If the CRA has an issue with it, they will sort it out during an audit where the CRA has broad authority to compel information from the employer. If CRA denies the claim and you pursue this in court, a judge will ask to see if you attempted to get a signed T2200.
Yes, you can deduct the cost of internet fees if you work from home, but only the portion that relates to your work.
To calculate the percentage that relates to your work, you need to use a reasonable basis, such as the area of the work space divided by the total finished area of your home. For instance, if your work space represents 12% of your home, you can only deduct 12% of your internet costs. If your internet access was not used for work, you can’t claim it at all.
If you are a salaried employee, you can only claim a percentage of a vehicle’s cost. This is called a capital cost allowance. You can also deduct your motor vehicle expenses as long as you were required to work away from the place of business and your employer did not offer a motor vehicle allowance or reimburse you.
If your income is commission-based, you must also have paid for your own expenses under your employment contract, been required to work away from your employer’s place of business, received pay in amounts that reflect sales volume or contracts negotiated, and did not earn a non-taxable allowance to cover your travel expenses. If your employer reimbursed you for any of your expenses, you may not claim this deduction.
If you are self-employed, you may deduct motor vehicle expenses you use to earn business income. This includes leasing fees or loans, fuel and oil, repairs and maintenance, license and registration fees, and insurance.
If you are an employee, you may not claim the purchase of a laptop or computer as an expense. If you are a commission-based employee and lease a computer, you may claim a portion of the lease as long as it reasonably relates to your commission-based work.
You’ll need to complete form T777S or form T777, both of which are supported by other documents. Use form T777S to claim your home office expenses if you are not claiming any other employment expenses (mostly if you are working from home due to COVID19; also requires form T2200S). Use form T777 if you are claiming other employment expenses. If you are employed, you will also need form T2200 or T2200S from your employer.
You can also take advantage of the temporary flat rate method. If you worked more than 50% of the time from home for at least four consecutive weeks due to the COVID-19 pandemic, you can claim $2 for each day you worked from home. The maximum claim is $500 per individual in 2021 and in 2022. This temporary method can only be used for the 2020, 2021 and 2022 tax years. See if you’re eligible.
Nothing. You are required to keep records of your expenses throughout the year, including a daily record of expenses (with receipts and any canceled checks), any ticket stubs for travel, any invoices, any monthly credit card statements, and a record of each motor vehicle you used for employment that shows the total kilometers you drove and the kilometers you drove for employment purposes.
Receipts for merchandise must show the date of the purchase, the name and address of the seller, a description of the goods or services you purchased, and information regarding the GST/HST you paid on your expenses, or the rate of tax if you are claiming the GST/HST rebate for employees.
However, if you worked from home in 2022 due to the COVID-19 pandemic and plan to claim a deduction for home office expenses using the temporary flat rate method, you do not need a T2200S.
Furthermore, it’s smart to keep records of any motor vehicles or musical instruments you bought or sold in order to claim capital cost allowance. Record the other party’s name, the amount of the transaction, and the date. You do not need to send your records or receipts with your income tax and benefit return, but you should keep them for six years in case the CRA requests them.
You can deduct part of a basic mobile phone plan, but not costs to connect, license, buy, or lease the phone. You may not claim office furniture or computer equipment (as these are considered capital expenses). You cannot deduct home insurance costs, mortgage interest, or property taxes. Most importantly, you cannot claim any expenses for which you were reimbursed.
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