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CRA consults stakeholders on employee work-from-home expense deduction
In response to the need for clarity and guidance from employees and the tax community, on Sept. 11, 2020, the Canada Revenue Agency (CRA) conducted a consultation hosted by the Canadian Chamber of Commerce. The purpose of the consultation was to obtain feedback on the employee work-space-in-the-home deduction availability and compliance measures (T2200 form).
Takeaways from the consultation
• At this time, the CRA still requires employers to provide employees with a T2200. Although it has been shortened and simplified, consultation participants emphasized that it is still a burdensome requirement that will result in significant costs for large employers.
• Groups strongly supports alleviating the burden posed by the T2200 form by amending the T4 slip.
• The CRA confirmed that the requirement to work from home does not need to be in writing. In cases where there is no written agreement, this requirement is satisfied by a “meeting of the minds” between the employer and the employee that the work must be done from home. The CRA acknowledged that taxpayers require clarity with respect to what the CRA considers to constitute a “meeting of the minds” for the purposes of eligibility for this deduction.
• CRA to provide further guidance and examples on the requirements that must be met and the expense claims that can be made by employees for work-space-in-the-home expenses incurred during COVID-19.
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