Does your employer have to provide Form T2200?

Many Canadians will be asking their employer for a signed Form T2200: Declaration of Conditions of Employment to allow them to claim employment expenses related to working from home.  

However, employers have no legal requirement to provide one.

“Under the Income Tax Act, there’s nothing really which compels the employer to issue the Form T2200,” said Lawrence Levin, tax partner with EY Canada in Toronto, during a February webinar on claiming home-office expenses.

The Canada Revenue Agency has stated it expects employers to provide the form if an employee meets the conditions for claiming expenses, Levin said, and many employers do. However, there is no statutory requirement.

Edward Rajaratnam, tax partner with EY Canada in Toronto, said in an interview that some clients have told him they’re considering not providing their employees the form this year, given that the CRA did not issue the 2023 version or revised guidance until Feb. 2.

Many employees prefer to file well ahead of the tax-filing deadline of April 30, leaving little time for employers to enact processes for providing the forms.

The 2023 tax filing season opens Monday.

Rajaratnam said companies should provide a Form T2200 to eligible employees, even if it’s not required: “You don’t want to negatively impact [company culture] just for a form.”

Employees who are required to pay for employment expenses for which they are not reimbursed, including home-office expenses, may be able to claim a deduction for the expenses if they worked from a home office more than 50% of the time for at least four consecutive weeks in a year.

Employees who worked from home in 2023 and who are eligible to claim home-office expenses must use the “detailed” method to do so, which will require obtaining a completed T2200.

The temporary “flat rate” method, which allowed Canadians working from home due to Covid to claim up to $400 in employment expenses in 2020 and up to $500 in 2021 and 2022, is not available for 2023. That method did not require the employee to get a form from their employer.

With the flat-rate method no longer available, employers will likely be receiving more requests for the T2200 for 2023, Rajaratnam said. Further, the shorter version of the T2200 — the T2200S: Declaration of Conditions of Employment for Working at Home Due to COVID-19 — that the CRA offered for 2020, 2021 and 2022 isn’t available for 2023.

Typically, an employee must be required to work from home in order to claim a deduction for home-office expenses.

However, employees who worked from home voluntarily last year under an agreement with their employer will be able to claim employment expenses on their tax return, the CRA said in their guidance for 2023. The agreement can be either written or verbal and does not need to be part of an employment contract.