On February 23 U.S. President Biden and Prime Minister Trudeau issued a ‘Roadmap for a Renewed U.S.-Canada Partnership’ stating ‘Both leaders agreed to take a coordinated approach based on science and public health criteria when considering measures to ease Canada-U.S. border restrictions in the future.’ Less than five months later, Washington appears to have lost its copy
Since March 2020, more than 6 million Canadians have been required to work from home because of public health orders, in an effort to reduce the spread of COVID-19 and protect our communities. This means an unprecedented number of taxpayers will be eligible to claim work-from-home deductions on their personal income tax return for 2020.
Under the current system, employers are required to fill out a special form – known as the T2200 – to confirm that a given employee has worked from home and can claim deductions for home office expenses, such as rent or utilities. This system however, will generate a burdensome amount of paperwork for Canadian employers already struggling to adapt to the pandemic.
Left unaddressed, employers next year will be required to devote significant resources and employee hours to filling out millions of forms to confirm what the government already knows – an unprecedented number of Canadians are working from home because the government has asked them to do so. If employers are required to fill out any multi-page form for this purpose, the compliance cost for businesses of all sizes will likely exceed the benefits paid out to employees.
We have welcomed the many measures the federal government has taken to support businesses and individual Canadians in this difficult time. However, time is running out for the federal government to take steps on T2200s. We strongly encourage the government to make it simple and convenient for employees to claim existing work-from-home tax deductions.
In particular, we urge the federal Minister of Finance to work with the Canada Revenue Agency to waive the requirement for employers to fill out the T2200 forms for the 2020 tax year and creating a simplified temporary tax deduction for individuals working from home. This will enable the Canada Revenue Agency to focus resources in the coming months on support and education for the millions of Canadian employees who will be applying for this tax deduction for the first time.
At a time of unprecedented upheaval in the economy, we believe it makes good sense for the government to take advantage of every available opportunity to support struggling Canadian employers with sensible changes to regulatory and tax requirements.