Is the Work From Home Tax Form Worth It?

Working remotely has carved out a permanent place in society now. To accommodate this change, the Canadian Government implemented some tax updates to help cover the costs of working from home. To take advantage of this update means filling out the Work From Home Tax Form. Follow along as financial expert Colin answers a reader’s question about the process of filling out the Work From Home Tax Form.

Hi Monique,

Congrats on planning ahead for the tax season! Your question is a fair one. Before you spend time filling out any extra tax forms, it only makes sense to figure out whether it’s actually worth the effort.

My honest answer is that I can’t say for sure without knowing your situation. I don’t know how much time you worked from home, the expenses you incurred, or whether your employer reimbursed you. All of those details affect how much you could save.

What I can do is walk you through how the “work-from-home tax form” works, who qualifies, and the types of expenses you can claim. Once you understand the process and the rules, you should be in a much better position to decide whether it makes financial sense for you.

What is the T2200?

When people talk about the work-from-home tax form, they’re usually referring to Form T2200, which is issued by the Canada Revenue Agency (CRA). This form allows employees to claim certain employment expenses incurred when they were required to work from home.

I’ll get into the meaning of “required” a bit later, but first, let’s address the form T2200. 

Form T2200 is called the “Declaration of Conditions of Employment.” It isn’t something you fill out yourself. Your employer has to complete and sign it. The form confirms that, as part of your employment, you had to work from home and pay certain expenses out of pocket.

Once you have a signed T2200, you’ll need to use another form, called the T777, to calculate your total employment expenses (related to your work-from-home arrangement). Once you’ve completed this form, you’ll need to report the total on line 22900 of your income tax return.

Note that this amount is a tax deduction and not a tax credit. 

A tax credit directly reduces the amount of tax you owe. A tax deduction reduces your taxable employment income. That means it lowers the amount of income the CRA taxes in the first place.

Who can claim home office expenses? 

If you’re claiming home office expenses as an employee for the 2025 tax year, you must meet all of the following criteria as set out by the CRA. 

• Your employer required you to work from home. Even if you have a voluntary telework arrangement with your employer, the CRA considers it a requirement that you are working from home. It doesn’t have to be a clause in your employment contract. 
• You incurred expenses related to the workspace in your home. You cannot claim expenses that your employer has or will reimburse you for. 
• You spent more than 50% of your time working from your home workspace for at least 4 consecutive weeks during the year, or you only use your workspace to earn employment income. This space must also be used regularly for any work-related in-person meetings, if applicable. 
• Your expenses must be used directly for your work.
• You must have a completed and signed copy of Form T2200.  

What qualifies as a workspace? 

The CRA considers two types of home workspaces. One is a common (shared) area. This means that it also serves other purposes beyond your work. For example, a computer desk in your living room or your kitchen table would be considered a common workspace. The other is a designated room you use only for work, such as a home office or spare room. 

Remember that without a signed T2200 form from your employer, you cannot make the claim at all.

What expenses can you claim?

If you qualify, you may be able to deduct a portion of your rent, heat, electricity, water, and internet. You can also claim office supplies such as paper and printer ink.

If you own your home, the rules are stricter. Most employees cannot deduct mortgage payments, and property taxes and home insurance are also generally not allowed unless you are a commissioned employee.

The amount you can claim depends on how much of your home you use as your workspace. For example, if your home office takes up 10% of your home’s total square footage, you may be able to deduct 10% of your eligible household expenses.

If you worked from home part-time, the amount may be adjusted further. 

This is where Form T777 comes in, and it’s where people often feel overwhelmed. However, most tax software programs, like TurboTax, H&R Block, or Wealthsimple Tax, will guide you through the process, step by step. 

What happened to the flat rate method? 

During the COVID-19 pandemic, the CRA offered a simple, flat-rate method because many people were forced to work from home. Employees could claim a fixed amount per day worked from home without calculating actual expenses. It was meant as temporary tax relief.

That option is now gone.

Today, employees must use the detailed method. That means you need to keep your receipts and calculate the specific costs. It does require a bit more effort than it did a few years ago, unfortunately. 

So, is it worth it? 

The short answer is, it depends. Let’s say you rent your home, your home office occupies 10% of your living space, and you worked from home full-time for the entire year. If your annual rent and utilities total $24,000, you might be able to deduct about $2,400.

If you are in a 30% tax bracket, that deduction could reduce your tax bill by around $700, which is significant. 

On the other hand, if you have a small workspace and only work from home for four or five weeks out of the year, or your eligible expenses are limited, you may only save a few hundred dollars, or less. 

For some, that amount makes the paperwork worthwhile. For others, it may not.

The bottom line

If you want to maximize your tax return, start by asking your employer if they are willing to complete a T2200 form. Should the answer be no, the decision is made for you.

If they agree, then try to estimate the percentage of your home used for work. Add up your annual rent, utilities, internet, and office supplies, then run the numbers through your tax software before you file your return.

Remember, you don’t have to commit to the claim until you see what it actually saves you. Should there be several hundred dollars or more to be had, it’s probably worth the extra steps. If not, you may want to keep things simple.

If all else fails or you are still confused, seek out a tax professional, like an accountant or professional tax preparer, and they should be able to help you decide. 

Remember, the form T2200 is not an employee bonus. It’s just a way for employees to deduct actual employment expenses from their personal income tax return.

It definitely takes effort, but if you work remotely for a large portion of the year, especially if you rent, it can significantly reduce your tax bill.