Many employees work from home either entirely or as part of a hybrid work arrangement. For those employees to claim a deduction for home office expenses, or other expenses of employment, their employers must provide them with a signed Canada Revenue Agency (CRA) Form T2200 — Declaration of Conditions of Employment. This is a form the employer fills out to certify the employee was required to pay expenses, and that other conditions were met.[1]
Let’s review what an employer is specifically required to certify on Form T2200 for an employee to be able to deduct home office expenses.
Certification on Form T2200
For 2024 tax filing, employers must certify whether the employee’s contract required them “to pay their own expenses while carrying out the duties of employment,” even if the employee is reimbursed for some expenses. In addition, the employer must certify whether it required the employee “to use a part of their home for work.”
The CRA has confirmed, and Form T2200 indicates, that this requirement need not be part of the contract of employment, and it will be sufficient if there is a verbal or written agreement. For instance, if an employee voluntarily enters into a telework arrangement with their employer, they will be considered to have been required to work from home. This arrangement could be hybrid and continue to satisfy this condition. It will also be satisfied if the employee works from home due to a medical condition that cannot be accommodated by their employer in the employer’s premises.
The employer must also certify whether the employee has used the work space in one of the two acceptable ways to use a work space and claim home office expenses:
1. Work more than 50% of time from home
The employer must certify whether the employee worked more than 50% of the time from their home for at least four consecutive weeks. This would be satisfied if the employee worked from home three days per week, or worked from home three weeks out of every four-week period. The condition can also be satisfied for employees who work part-time — for example, with an arrangement where they work three days per week, two of which are in the home office. If, on the other hand, the employee works three days per week, and only one of those is from a home office, this requirement won’t be satisfied.
2. Work space used for in-person meetings
The second way to use a home office and be able to claim home office expenses is if the work space is both used exclusively to earn employment income, and is also used on a regular and continuous basis to meet (in person and not virtually) with clients, customers, or other people while performing their duties of employment. The employer is required to certify whether the employee used the home office “regularly and continually for in-person meetings with clients or other persons while doing their work.”
What’s changed for 2024
Form T2200 for the 2023 tax year required that employers who certified that an employee was required to use their home for work also indicate the percentage of their duties that were performed at their home office. This calculation had to be individually made for all employees who requested Form T2200. For employers with many employees working from home, the process could be quite time-consuming. This information does not have to be provided on the 2024 form.
Providing Form T2200 is the first step for employees to claim home office expenses. The employee then must do calculations and complete CRA’s Form T777 Statement of Employment Expenses. The CRA has an online calculator to assist employees with this process.
[1] The employer is not legally obliged to issue a Form T2200 certificate, but CRA expects the employer to issue one if the employee meets the conditions to claim employment expenses, including home office expenses.