Significant tax deductions possible for at-home workers amid pandemic
HALIFAX -- As Maritimers prepare to return to the office amid eased COVID-19 restrictions, some may miss the opportunity to work from home. However, the past few months could mean a small windfall for some folks – if they've saved receipts for the 2021 tax season.
During a most unusual year, it's reassuring that little has changed for the Canada Revenue Agency in 2020; despite extended deadlines, it's business as usual. But, for many people, filing taxes in the coming year could be a whole new experience.
Experts say millions of people who have worked from home for several months could be eligible for significant tax deductions for the 2020 tax-year.
To qualify, the CRA says a home office must be used for at least half a year; or on a regular and continuous basis for meeting clients, customers, or other people in the course of their employment duties. If the conditions apply, a whole host of deductions are available to applicants.
"You can deduct that portion of your rent, home insurance, repairs - as long as they pertain to the home office themselves," says H&R Block senior tax expert, Micheal Davis.
Davis notes expenses such as kitchen renovations don't apply; however, any work-related costs such as internet service and office supplies are deductible.
"You can take those things off your tax return next year to help offset some of your income," says Davis.
The CRA notes it's also important to obtain and keep a copy of a Declaration of Conditions of Employment, which is to be completed and signed by the employer. Commonly known as form T2200 – without it, troubles could arise when tax time rolls around.
So, as the 2020 tax season winds down, perhaps it's a good idea to begin planning for next year's tax season.