Are you working from home – what expenses can be claimed?

Work-space-in-the-home expenses

If you meet the eligibility criteria, you can claim a portion of certain expenses related to the use of a workspace in your home as follows:

  • Expenses you paid that relate to the work space as well as other areas of the home. You can claim the percentage of those expenses that relate to the work space.
  • Expenses related to the work space only. You can claim the total amount of the expenses if the amount paid is reasonable.
  • Expenses related to a part of the house that you did not use as a work space. You cannot claim any part of those expenses.

Can be claimed:

All salaried employees and commission employees can claim:
  • 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 
Commission employees can also claim:
  • home insurance
  • property taxes
  • lease of a cell phone, computer, laptop, tablet, fax machine, etc. that reasonably relate to earning commission income

Cannot be claimed:

  • mortgage interest
  • principal mortgage payments
  • home internet connection fees
  • furniture
  • capital expenses (replacing windows, flooring, furnace, etc)Footnote5
  • wall decorations

Office supplies and phone expenses

If your employer requires you to pay for office supplies or certain phone expenses, you may be able to claim those expenses.

Although you can claim these expenses, they are not related to the physical work space in your home. They are claimed on a different section of Form T777S or Form T777

Limitations on work-space-in-the-home expenses

The work-space-in-the-home expenses you can claim are limited when:

  • you work only a part of the year from your home:
    • You can only claim the expenses you paid in the part of the year you worked from home. You cannot claim the expenses you paid for the whole year.Example: Multiple periods working from home
  • you have multiple income sources:
    • You can claim work-space-in-the-home expenses only from the income the expenses relate to, and not from any other income.
  • your expenses exceed your income:
    • The amount you can claim for work-space-in-the-home expenses is limited to the amount of employment income that is left after you have deducted all other employment expenses. This means that you cannot use work-space-in-the-home expenses to create or increase a loss from employment. If you cannot claim all your work-space-in-the-home expenses in the year, you can carry forward the expenses. You can claim these expenses in the next year as long as you are reporting income from the same employer. However, you cannot create or increase a loss from employment by carrying forward work-space-in-the-home expenses.
    • If you are a commission employee, you may not be able to claim your total work-space-in-the-home expenses if they exceed your commission income. T

How to dispute a tax decision with CRA

Speak to the Canada Revenue Agency when you disagree with a decision

Some disagreements are a result of a lack of information or miscommunication. Before you formally dispute a CRA decision, contact the CRA if you have new or additional information to help the CRA with a decision, you can request an adjustment. This often resolves the disagreement.

After talking to the CRA, you may not be satisfied with the explanation. You may think the CRA has misinterpreted the facts or has not applied the law correctly. If you find yourself in one of these situations, you can request a formal review.

You have the right to a formal review

You have the right to a formal and impartial review if you believe we have misinterpreted the facts or have not applied the law correctly. You can file an objection to request a formal review of your case.

In most cases, you have to file a notice of objection within 90 days from the date on the notice of assessment or notice of determination. When filing a notice of objection, you have to submit the facts, reasons, and documentation in support of your position.

Where an objection is filed, an officer will be assigned to the file. This officer will conduct a preliminary review of the facts and issues relevant to your situation. As part of this review, you or your authorized representative may be contacted to discuss the matter and to get more documents and details. The officer will then consider the information and make a decision.

You have the right to appeal following a formal review, if you are not satisfied with the decision reached during the review, you can appeal or seek a judicial review from the appropriate court or, for certain matters, to the Canadian International Trade Tribunal.

Legislation guides the appeals process, determining the Court or Tribunal you deal with and what process you will follow. Information is available on how to file an appeal to the Court depending on your circumstances.

Note that the Taxpayer’s Bill of Rights gives you the right not to pay income tax amounts in dispute until you have had an impartial review by the CRA or, if you have sent an appeal, until the court has issued its decision. However, interest charges will continue to accumulate during this period. Also, in certain circumstances, the CRA can take collection action even though an objection or appeal has been sent. These circumstances include, namely, cases where an amount is in jeopardy, where the amount assessed relates to GST or source deductions, as well as cases where the taxpayer is a large corporation.

If you disagree with the Income Tax Act or other tax legislation matters, contact the Department of Finance Canada. The CRA administers tax legislation whereas the Department of Finance Canada is responsible for developing tax laws.