Did you know that if you’re a salaried employee and work from home you may be able to claim employment expenses? You might think those benefits are reserved only for freelancers or self-employed folks. But the rules around what salaried employees can deduct as expenses are real—they just may look a little different from those of the self-employed.
The key to understanding these expense rules is the T2200 tax form. Here’s what it’s all about.
Key Takeaways
- If you’re a salaried employee, you can claim certain employment expenses when you complete your tax return if your employer fills out the T2200 Declaration of Conditions of Employment form.
- As an employee, there are strict rules around what you can claim and all expenses must get approved by your employer.
- Eligible expenses you can claim on the T2200 include accounting and legal fees, travel expenses, parking costs, office supplies, salary expenses, office rent, motor vehicle expenses and work-space-in-the-home expenses.
What is the T2200 tax form used for?
As a full-time salaried employee, you’ll use Form T2200, “Declaration of Conditions of Employment,” to deduct work-related expenses (including home office expenses) from your income tax return. This can help reduce total taxes payable to the Canada Revenue Agency (CRA) or increase your refund.
What’s the difference between T2200 and T777?
As an employee, you don’t have to complete the T2200 yourself because this responsibility falls on your employer. More specifically, your employer must fill out Part B of this 3-page document and sign the “Employer Declaration” box. Then you can claim your approved and eligible expenses. If you do not have a signed T2200 and do not expect your employer to provide one, you should not be claiming employment expenses.
You don’t need to submit the T2200 form with your income tax return. But it’s necessary to keep a record of it, along with all the receipts you’re claiming in case the CRA asks to see it.
Instead of documenting all your expenses on the T2200 form, you’ll use Form T777, “Statement of Employment Expenses,” to calculate your total expenses on your tax return.
A few other forms may be used in this process, depending on the circumstances:
- If you’re a transport employee, fill out the TL2 form, “Claim for Meals and Lodging Expenses.”
- If you’re claiming a Goods and Services Tax/Harmonized Sales Tax (GST/HST) rebate submit the GST370 application, “Employee and Partner GST/HST Rebate Application.”
- Salaried and commissioned employees who reside in Quebec should complete the TP-64.3-V Form and have their employers sign it.
What expenses can be claimed on T2200?
You may be able to claim expenses you paid to earn employment income if you meet one of these 2 conditions:
- Your employment contract requires you to incur these expenses as part of your employment.
- Your employer did not reimburse you.
Eligible expenses you can claim under the T2200 form include:
- accounting and legal fees—legal fees to establish the right of salary
- travel expenses—meals, lodging, and transportation other than motor vehicle expenses
- parking—only during work time and not at the main employer’s workplace
- office supplies—consumable expenses such as pens, paper, cleaning supplies
- salary expenses—salary paid to an assistant
- office rent—renting a space to work or meet clients
- motor vehicle expenses—vehicle operating expenses and capital cost allowance (CCA)
- work-space-in-the-home expenses—percentage of the home expenses related to earning income
Are there different types of employment expenses?
There are several types of employment you can claim expenses for—each with its own eligibility conditions and allowable expenses. Depending on the work you do, here are some resources to help uncover what you can claim to minimize your taxes:
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