Deduction Of Home Office Expenses For Employees Required To Work From Home

Months into COVID lockdown with no near end in sight, employers continue to encourage employees to work from home and seek opportunities to offer financial relief to their employees.

As we reported in our May 2020 update, among the conditions to be eligible to claim home office expenses under the Income Tax Act, the home office must be where the employee "principally" (more than 50 per cent of the time) performs his or her duties of employment. Historically, the CRA has taken the position that the determination time for the "principally" test is to be determined over the course of the full period of employment in the calendar year, rather than for just the part of the year during which the employee may be (as in the case of COVID) required to work from home for that employment. This would imply that for a calendar year of employment in which the person works either fully from home or not at all from home for any given month, the employee would have to work from home