T2200 Declaration of Conditions of Employment: Work-From-Home Expenses

Is there a "work from home tax credit" in Canada?

No, there is no longer a separate credit. From 2020 to 2022 the CRA allowed a temporary flat rate of $2 for each day worked from home, with no employer form needed. The CRA says the temporary flat rate method "does not apply to the 2023 and later tax years." Today, employees who work from home use the detailed method: they deduct the work share of actual costs on line 22900 (other employment expenses), using Form T777S or T777, and they must have a T2200 signed by their employer.

Because it is a deduction and not a credit, the saving depends on your marginal tax rate. A $1,000 deduction saves about $546 for an Ontario employee earning $72,000, and less at lower incomes.

Who qualifies: the four tests

According to the CRA, you can claim work-space-in-the-home expenses only if you meet all of these conditions:

An informal arrangement counts. The T2200 itself says the requirement to work from home "does not have to be part of the employee's employment contract, and may be a written or verbal agreement." A formal telework arrangement also counts. Choosing to work from home when an office is available to you does not.

• Your employer required you to work from home, and you had to pay the expenses yourself.
• You worked more than 50% of the time from the home work space for at least four consecutive weeks, or you used the space only for work and regularly met clients there in person.
• The expenses were used directly in your work and were not reimbursed by your employer.
• You have a completed and signed Form T2200 from your employer.

What is on the T2200 and who fills it out

The employer completes the form and gives it to you. Part C asks whether your contract required you to pay your own expenses (if not, you cannot claim anything), whether you were paid by commission, whether you had to pay for supplies, an assistant or a cell phone, whether you had to use part of your home, and whether you met the 50%/four-week or client-meeting test. Question 5 lists any reimbursements, which you must subtract from your claim. Later questions cover car, travel, tradesperson tools and apprentice mechanics.

You do not send the T2200 with your return. The form says the employee "must keep it in case the Canada Revenue Agency (CRA) asks to see it." The CRA accepts an electronic signature from the employer if it follows CRA guidance, so it does not need to be a wet-ink paper form.

Quebec employees also need TP-64.3-V, General Employment Conditions, for their Revenu Québec return. Revenu Québec says any employee who wants to deduct employment expenses "must have this form completed by their employer."

What you can deduct: salaried vs commission employees

Guide T4044, Employment Expenses, separates the two groups. Salaried employees can deduct the work share of electricity, heating, water and other utilities, maintenance and minor repairs, rent, and home internet access fees. Commission employees can also deduct the work share of property taxes and home insurance, plus leased equipment such as a cell phone or computer.

Neither group can deduct mortgage interest, capital cost allowance on the home, or furniture and other capital purchases. A salaried homeowner usually ends up claiming utilities, internet and maintenance only. A tenant can claim the work share of rent, which is usually the largest item.

Worked example: calculating the home office deduction

The CRA formula starts with the share of your home's finished area that is used as a work space. Take an Ontario tenant earning $72,000 with a dedicated 12 m² office in a 120 m² apartment, which is 10% of the home. Annual rent is $26,400, utilities $2,160 and home internet $960.

The claim is 10% × $29,520 = $2,952 on line 22900. Using our 2026 Ontario engine, that deduction reduces federal and provincial tax by about $875. If the employer reimbursed part of the internet bill, that part comes off first.

For a shared space, such as a corner of the dining room, the CRA also prorates by hours. If the area is 20 m² and you work there 45 hours of the 168 in a week, the work share is 20/120 × 45/168 ≈ 4.5% of eligible costs. The CRA's calculator also shows that expenses cannot be more than the employment income they relate to. Any excess is carried forward to future years.

Mistakes that get home office claims reassessed

Each of these conflicts with the CRA eligibility rules or the T2200 itself:

• Claiming without a T2200, or with a T2200 where the employer answered "No" to question 1 or question 4.
• Deducting mortgage interest or property tax as a salaried employee.
• Using the total home area instead of the finished area, or leaving out the hours proration for a shared space.
• Not subtracting reimbursements or a home office allowance from the employer.
• Claiming the $2-a-day flat rate for a year after 2022.
• Not keeping receipts: utility bills, rent receipts and internet invoices should be kept with the T2200.