A few year-end items

DECEMBER 21, 2020

All the best to everyone for a great holiday season! It's been a challenging year and we have learned a lot about the entrepreneurial spirit in Canada through our amazing clients and friends.

A few quick pre year-end items:

  1. Wage subsidy

We might sound like a broken record but we need to drill this home given its importance: please take one further look at the wage subsidy program if you haven’t recently.

Many of you reviewed carefully the wage subsidy program last summer.  If you have not reviewed it since please make sure you either review yourself or reach out to RMT – the rules introduced mid-summer provide many options and apply if you have any revenue decline.  The application deadline for the claims is the later of January 31, 2021 and 180 days after the end of the claim period. So for claim period 1 to 5 the deadline is January 31, 2021.

  1. Rent subsidy

As well a reminder that the rent subsidy program mirrors in most ways the wage subsidy program. So, if you qualified for wage subsidy in the fall make sure you review the rent subsidy as well.

  1. Home office

Many of our clients have been asking about employee deductions for home office use.  On December 15th CRA released further detail on the home office expenses. The form required is T777S. Anyone who was required to, or chose to work from home at least half of the time for a minimum of four straight weeks is eligible. There are two options available.

Option 1 – Temporary flat rate method, eligible employees can claim a flat-rate deduction of $2 for each day they worked from home, up to a maximum of $400. Also, employees will not need supporting documents or a form from their employer.

Option 2 – Detailed method, employees can claim eligible expenses for home office expenses, but will need a T2200S signed by their employer and keep supporting documents for the claim.  

Generally, if an employee owns their home they will benefit from the simplified method and if they rent and have a dedicated office it will be better to complete the detailed method. CRA has a calculator found here that will help employees determine whether their deduction is higher using the simplified method or the detailed method.

More information can be found here.

You may wish to share this information with your employees.