Remote Work Tax Basics
Who Can Claim What
| Worker Type |
What You Can Claim |
| Employee with T2200 |
Home office expenses |
| Employee without T2200 |
Usually nothing |
| Self-employed |
Business use of home |
| Contractor |
Business expenses |
| What It Is |
Details |
| Declaration |
Employer certifies conditions |
| Required for |
Employee expense claims |
| Employer signs |
Before you claim |
| Keep on file |
In case of CRA request |
Employees Working From Home
Requirements to Claim
| Condition |
Needed |
| Required by employer |
To work from home |
| T2200 signed |
By employer |
| OR simplified method |
See below |
Two Methods
| Method |
Best For |
| Detailed |
Higher expenses |
| Simplified |
Straightforward |
Simplified Method (T2200S)
| Feature |
Details |
| Flat rate |
$2 per day worked from home |
| Maximum |
$500 per year |
| No receipts |
Required |
| T2200S |
Shorter form from employer |
Detailed Method
| Expense |
Deductible Portion |
| Utilities |
% of home |
| Internet |
% of home |
| Rent |
% of home |
| Maintenance |
% of home |
| Office supplies |
Direct attribution |
Calculating Home Office Percentage
| Method |
Calculation |
| Square footage |
Office sq ft ÷ Total sq ft |
| Rooms |
1 room ÷ total rooms |
| Reasonable |
CRA must accept |
Example Calculation
| Expense |
Annual |
Office 10% |
| Electricity |
$1,800 |
$180 |
| Gas/heat |
$1,200 |
$120 |
| Internet |
$1,200 |
$120 |
| Rent |
$24,000 |
$2,400 |
| Total |
|
$2,820 |
What You CANNOT Claim as Employee
| Not Deductible |
Why |
| Mortgage interest |
Homeowners only claim rent |
| Property tax |
Not allowed |
| Insurance |
Not for employees |
| Furniture |
Usually not |
Self-Employed Working From Home
Broader Deductions
| Can Claim |
Details |
| Utilities |
Business portion |
| Internet |
Business use % |
| Mortgage interest |
Business portion |
| Property tax |
Business portion |
| Insurance |
Business portion |
| Repairs |
Business portion |
Business Use %
| Calculate |
Based On |
| Space |
Square footage |
| Time |
If shared space |
| Reasonable |
Documentation |
Capital Cost Allowance
| For Home |
Caution |
| Can claim CCA |
On home |
| But |
Triggers principal residence issues |
| Generally avoid |
CCA on home |
Working for Foreign Companies
Canadian Tax Residency
| If You |
Tax Status |
| Live in Canada |
Canadian tax resident |
| Work remotely |
For any employer |
| Pay tax |
To Canada on worldwide income |
US Employer
| Situation |
Treatment |
| US company |
You’re Canadian for tax |
| No US withholding |
Should not apply |
| Report to CRA |
All income |
| May be contractor |
Not employee technically |
Setting Up Correctly
| Issue |
Solution |
| Don’t want US nexus |
Hire through Canadian entity |
| Employer of record |
Services exist |
| Contractor status |
W-8BEN form |
Cross-Border Complications
| Consideration |
Action |
| Tax treaty |
Know provisions |
| Social security |
CPP vs US SS |
| State taxes |
Usually not applicable |
| Professional advice |
Strongly recommended |
Digital Nomads
Canadian Tax Rules
| If You |
Tax Residence |
| Have ties to Canada |
Still Canadian resident |
| Leave temporarily |
May still be resident |
| Return within 2 years |
Likely still resident |
Maintaining Residency
| Factor |
Ties |
| Home in Canada |
Strong tie |
| Spouse/kids in Canada |
Strong tie |
| Bank accounts |
Secondary tie |
| Driver’s license |
Secondary tie |
| Health card |
Secondary tie |
Becoming Non-Resident
| To Be Non-Resident |
Requirements |
| Sever ties |
Home, family, etc. |
| Establish elsewhere |
New residence |
| Departure tax |
May apply |
| Consult professional |
Before leaving |
Working in Different Provinces
Provincial Tax
| Rule |
Details |
| Province on Dec 31 |
Determines tax rate |
| Where you live |
On that date |
| Doesn’t matter |
Where employer is |
Moving Mid-Year
| Situation |
Tax Treatment |
| Move provinces |
Dec 31 province applies |
| Different rates |
Full year at new rate |
| Plan timing |
If significant difference |
Example
| Move |
Impact |
| Alberta to Ontario in June |
Full year Ontario rates |
| Ontario to Alberta in June |
Full year Alberta rates |
| Consider timing |
For big moves |
Home Office Expenses Details
Eligible Supplies
| Item |
Deductible |
| Printer ink |
Yes |
| Paper |
Yes |
| Pens, stationery |
Yes |
| Computer repairs |
May be |
Equipment
| Item |
Treatment |
| Computer |
Capital expense (depreciate) |
| Desk |
Capital expense |
| Chair |
Capital expense |
| Monitor |
Capital expense |
For employees, generally not deductible unless specified on T2200.
Internet
| Claim |
Amount |
| Business portion |
Usually 50% or less |
| If also personal |
Can’t claim 100% |
| Document |
Usage estimate |
Record Keeping
What to Keep
| Document |
Why |
| T2200/T2200S |
Employer declaration |
| Bills |
Utilities, internet, rent |
| Home measurements |
Square footage |
| Work log |
Days worked from home |
How Long
| Keep Records |
Duration |
| 6 years |
From filing date |
| Longer if dispute |
Until resolved |
Common Mistakes
Errors to Avoid
| Mistake |
Problem |
| No T2200 and claiming |
Not allowed |
| Overclaiming percentage |
CRA scrutiny |
| Claiming mortgage principal |
Not deductible |
| Poor records |
Can’t support claim |
Red Flags
| Claim |
Careful |
| 100% internet |
Not reasonable if personal use |
| Large % of home |
Must be realistic |
| Equipment |
Needs T2200 support |
Summary
Quick Reference
| Status |
Key Points |
| Employee |
Need T2200 or use simplified |
| Self-employed |
Broader deductions |
| Foreign employer |
Canadian resident = Canadian tax |
| Digital nomad |
Likely still Canadian resident |
Checklist
| Task |
Done |
| Get T2200 if employee |
☐ |
| Calculate home % |
☐ |
| Track expenses |
☐ |
| Keep records |
☐ |
| Review cross-border |
If applicable ☐ |