Home Office Expenses 2020 Return: $2/Day Method and T2200 Options

Key takeaways

• The $2/day flat-rate home office deduction (maximum $500 in 2021) was available for employees required to work from home
• The detailed method allows deduction of actual expenses pro-rated for business use, but requires a completed T2200 from the employer
• A T2200 is required for the detailed method — employees cannot claim actual home office expenses without employer certification
• The flat-rate method was available for 2020, 2021, and 2022 only — it ended after 2022
• Employees can claim only workspace expenses — not the full cost of the workspace, but the incremental cost

The COVID-19 pandemic forced millions of Canadians to work from home, creating widespread interest in home office deductions. The CRA introduced a simplified flat-rate method for 2020–2022, but this temporary measure is now ended — employees returning to or claiming home office deductions for 2023 and later must use the detailed method with a T2200.

The flat-rate method (2020–2022 only)

For 2020, 2021, and 2022, employees who worked from home more than 50% of the time for at least four consecutive weeks due to COVID-19 could claim $2 per day they worked from home, up to $500 per year ($400 in 2020). No T2200 was required and no receipts were needed. This method has permanently ended — it is not available for 2023 or later.

The detailed method

For the detailed method, employees need a completed Form T2200 (Declaration of Conditions of Employment) from their employer. Eligible expenses include: electricity, heat, water, internet (if paid by the employee), home internet access costs, maintenance, rent. They do not include mortgage interest, property taxes, or home insurance (those are only available to self-employed individuals working from home). Expenses are pro-rated based on the workspace as a percentage of the home's total area and the hours the workspace is used for employment versus personal use.