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Federal fiscal update welcome news for employers, payroll: CPA

Employers will no longer need to fill out T2200 form for each remote worker


A think tank believes Ottawa should introduce a top marginal tax bracket to help pay for the large deficit caused by its response to COVID-19. (Sharkshock/Adobe Stock)

Employees working from home with “modest expenses” will be able to claim up to $400 in the 2020 tax year without the need to track detailed expenses.

And employers will, generally, no longer be required to confirm the status of employees by completing a T2200 form for each remote worker.

The Canadian Payroll Association is commending the federal government for Monday’s fiscal update, which included an announcement that will help taxpayers working from home during the pandemic access tax deductions they are entitled to, while eliminating a significant burden for payroll professionals and employers.

After government-mandated lockdowns and closures became the norm during the pandemic, more than 6 million Canadians found themselves newly working from home in 2020.

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With so many new remote workers, employers worried that they would be required to complete T2200 forms to enable them to claim work-from-home expenses — a herculean task which would have generated countless hours of work and cost employers more than $194 million collectively.

The T2200, Declaration of Conditions of Employment, is a Canada Revenue Agency form that an employer completes when an employee’s condition of employment requires them to work from home and/or results in them incurring expenses that aren’t covered by the company. The employee may be able to claim these expenses when they file their personal tax return.

Quebec has a similar form, the TP-64.3-V, General Employment Conditions, for the same purpose.

The government’s fall economic statement quelled those worries by announcing a streamlined approach for claiming work-from-home expenses that is a win-win for both employees and employers.

This new approach directly reflects recommendations made by the Canadian Payroll Association to both the Ministers of Finance and National Revenue, and the Canada Revenue Agency, says Peter Tzanetakis, President of the Canadian Payroll Association.

“Today’s announcement shows that the government is listening to the needs of payroll professionals across Canada,” he said on Nov. 30.

“Since the beginning of the pandemic, there have more than 300 legislative changes impacting payroll professionals who have been working tirelessly to help deliver essential programs to Canadians. Eliminating the T2200 for new remote workers in 2020 significantly reduces the burden to employers, enabling the focus to remain on essential business needs during this unprecedented time.”

The association continues to work with the Quebec government toward harmonization.