Three T2200 basics to understand in the year of remote work
Dec 03, 2020Resources
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As you may have read in the recent Year-End edition of The Works Magazine, the Canadian Payroll Association and the Chartered Professional Accountants of Canada are consulting with relevant government agencies on how to most efficiently administer work-from-home deductions typically submitted via the Canada Revenue Agency’s (CRA) T2200 form.
While discussions are still underway and Payworks remains engaged with these advisory committees, we wanted to share a preliminary overview of the evolving T2200 as this year – in which many organizations have explored remote work for the first time – comes to a close:
1. What’s changing for this year?
In order to reduce the administrative stress already heavy on the shoulders of employers at year-end, the Canadian Department of Finance’s Fall Economic Statement 2020 states that “the CRA will allow employees working from home in 2020 due to COVID-19 with modest expenses to claim up to $400, based on the amount of time working from home, without the need to track detailed expenses, and will generally not request that people provide a signed form from their employers.”
The CRA will be providing further details on this soon, but for the vast majority of employees that meet this criteria, this approach is considerably more beneficial than submitting a T2200 form.
2. What if employees want a T2200?
If employees still request a T2200, it’s up to your team to determine how best to manage this expectation and how to prioritize these forms among the various other year-end responsibilities.
As a reminder, detailed information is required for a T2200, and the effort to gather that information may outweigh the benefit of submitting the form. Based on what we know from the recent Fall Economic Statement, the T2200 may only be a worthwhile option for employees that have been issued this same form in past years.
3. What other details should I be gathering now?
For employees who still require a T2200 form, the CRA recommends consulting:
- Guide T4044, Employment Expenses
- Interpretations Bulletin IT-352, Employee’s Expenses, Including Work Space in Home Expenses
- Interpretations Bulletin IT-522, Vehicle, Travel and Sales Expenses of Employees
Payworks will continue to provide relevant details on the status of the new claim amount as it’s finalized. Make sure to check back for the latest updates!