Employment & Employees

Tax Tip: Tools of the trade deduction

If you are a tradesperson or qualified apprentice, the CRA allows you to deduct the cost of eligible tools you have to buy for your job. A tradesperson is required to work with his hands, so professional workers will not qualify to report expenses under an employed tradesperson. You can include any GST/HST paid at the cost price.

An eligible tool is a tool you bought for your job and has not been used before for any other purpose. The tool has to be essential to perform your job and is certified by your employer.

To claim a rebate on the GST/HST you paid on the tools, complete form GST370 and note the rebate on line 45700 of your income tax return.

To prove you had to buy the tools as a condition of your employment, your employer must complete form T2200, Declaration of Conditions of Employment. You don’t have to file this form with your taxes, just keep it in your records in case CRA asks for proof. However, you will have to complete the T777, Statement of Employment Expenses when filing your income tax return. Report the eligible amount in line 1770 of the T777 form.

TurboTax products offer an easy step-by-step guide to help you report the T2200 forms and fill out all related T777 forms to get the maximum deductions you are eligible for. Consider TurboTax Live Assist & Review if you need further guidance, and get unlimited help and advice as you do your taxes, plus a final review before you file. Or, choose TurboTax Live Full Service* and have one of our tax experts do your return from start to finish.

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