If you are one of the many individuals that had a work-from-home arrangement with your employer, depending on the time you spent working from home, you may be able to claim home office expenses on your 2023 personal tax return. However, the Canada Revenue Agency (CRA) has changed the options available for reporting those expenses. 

For the 2020, 2021 and 2022 tax years there were two methods available for claiming home office expenses—a temporary “flat rate” method as well as a more detailed method. However, for 2023 the simplified “flat rate” method is no longer available. Home office expenses must be claimed with the more detailed method and employees must obtain a completed CRA Form T2200: Declaration of Conditions of Employment from their employer.

The detailed method is more complex than the temporary flat rate method and requires more involved record keeping. The deduction available will depend on a number of factors including the amount of actual expenses incurred, the size of your workspace in relation to the size of your home and the type of workspace. Employees who wish to claim home office expenses will have to total and prorate their eligible expenses, file CRA Form T777: Statement of Employment Expenses, and claim the appropriate amount as a deduction on their 2023 personal tax return.

To claim the actual expenses you paid for working from your home, you must meet all of the following conditions:

• Your employer required you to work from home. Note: This may be via either written or verbal agreement.
• You were required to pay for expenses related to the workspace in your home
• One of the following applies:
  • Your workspace is where you mainly (more than 50% of the time) worked for a period of at least four consecutive weeks, or
  • You only use your workspace to earn employment income. You also have to use it regularly and continually for meeting clients, customers or other people in-person while doing your work.
• Your expenses are used directly in your work
• You have a completed and signed copy of Form T2200, Declaration of Conditions of Employment, from your employer. (You must keep a copy in case it is requested by the CRA.)

You cannot claim any expenses that were or will be reimbursed by your employer.

Employees who worked at home in 2023 and meet certain conditions may be eligible to deduct home office expenses such as home workspace, office supplies and other expenses such as employment use of a cell phone and long-distance calls for employment purposes. 

There are many rules and provisions when determining which expenses are available to claim, differences for salaried employees versus employees earning commissions, as well as what amount of the expenses can be claimed proportionate to business versus personal use. As these details are extensive and numerous, you are strongly encouraged to discuss your situation with your tax professional and review the details provided by CRA here. 

Some common home workspace expenses include:  

• Rent paid for a house or apartment where you live
• Electricity, heat, water or the utilities portion of your condominium fees
• Home internet access fees
• Maintenance (minor repairs, cleaning supplies, light bulbs, paint, etc.)

If you are a commission employee, you can also claim expenses that reasonably relate to earning commission income for the following:

• Property taxes
• Home insurance
• Lease of a cell phone, computer, laptop, tablet, fax machine, etc 

You cannot claim any of the following: 

• Capital cost allowance
• Mortgage interest
• Principal mortgage payments
• Home internet connection fees or the portion of fees related to the lease of a modem/router
• Capital expenses (replacing windows, flooring, furnace, etc.)
• Office equipment (printer, fax machine, briefcase, laptop case, or bag, calculator, etc.)
• Monthly basic rate for a landline telephone
• Cell phone connection, or license fees
• Purchase of a cell phone, computer, laptop, tablet, fax machine, etc.
• Computer accessories, (monitor, mouse, keyboard headset, microphone, speakers, webcam, router, etc.)
• Other electronics (television, smart speaker, voice assistant, etc.)
• Furniture (desk, chair, etc.)

As a final note, regardless of the amount of expenses you may be able to tally, only expenses up to the amount of employment income remaining after all other employment expenses have been deducted can be claimed. Meaning that you cannot use expenses to incur a loss or negative income.

The CRA’s website also offers a tool to help determine eligible expenses for 2023.

For further information on other personal tax topics, you may be interested in the following article: Understanding your personal taxes in Alberta.