A tax deduction is often better than a tax credit because it reduces your taxable income. When you decrease your taxable income, you may save 15% to 54% tax depending on your income and where you live.
What can you claim for working from home in 2023?
The Canada Revenue Agency (CRA) introduced a temporary flat-rate home-office expense deduction for the 2020, 2021 and 2022 tax years. Last year, a taxpayer could claim $2 per day worked from home, up to a maximum of $500, as a deduction.
This simplified method is no longer available for 2023. The detailed method for claiming home-office expenses now applies for all eligible employees, Imtiaz, so you can still claim a deduction if you qualify. In order to be eligible to claim home-office expenses, an employee must:
Visit the CRA’s website for detailed eligibility criteria.
How to claim the work-from-home expense deduction for 2023
Some employers may need a reminder to provide Form T2200s to their employees for 2023. So, if you think you qualify and do not receive the form along with your T4 slip, it may be worth raising this with your employer.
You can claim a pro-rated percentage of the following expenses:
- Electricity
- Heat
- Water
- Utilities portion (electricity, heat, and water) of your condominium fees
- Home internet access fees
- Maintenance and minor repair costs
- Rent paid for a house or apartment where you live
You need to determine your workspace use by calculating the size of your workspace relative to all finished areas of your home. This percentage applied to your eligible expenses becomes your home-office expense deduction, Imtiaz.
When sharing a workspace
If the workspace is a shared area used for work and personal use, or if it is shared by more than one person who works from home, you may need to further reduce the eligible percentage of your home-office expenses that can be claimed. Visit the CRA’s website for information on how to determine the type and size of your workspace.
Jason Heath, CFP
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