Hundreds of thousands of Canadians could get a tax break for working from home during pandemic - CBC.ca | Canada News Media
Connect with us

News

Hundreds of thousands of Canadians could get a tax break for working from home during pandemic – CBC.ca

Published

 on


Hundreds of thousands of Canadians could be eligible for a lucrative tax deduction as a result of the COVID-19 pandemic.

But just how many get to claim that deduction could depend on their employers, and on how the Canada Revenue Agency deals with a series of questions raised by the sudden changes that have compelled millions of Canadians to work from home.

Armando Minicucci, a partner with the accounting firm Grant Thornton, said he expects a big increase in the number of Canadians able to claim a deduction for turning part of their home into an office.

“I would say the number would have to be in the hundreds of thousands,” he said.

It’s called the “work-space-in-the-home” deduction and you can claim it if you work from home more than 50 per cent of the time, or if you have a separate home office and use it to meet clients.

Either way, your employer has to certify that working from home is a condition of your employment. According to the Canada Revenue Agency (CRA), 174,210 Canadians took advantage of the deduction on their 2018 tax returns, claiming an average per person of $1,561.

The deduction allows those who qualify for it to reduce their tax bills by claiming a portion of their household expenses — such as utilities, cleaning and rent.

Normally, the number of people who can claim the deduction is limited. To qualify, you either have to spend more than 50 per cent of your time working from home, or you have to use a home office exclusively for work and regularly meet clients there.

How the pandemic changed things

The current rules require anyone claiming the deduction to get their employer to fill out a form — T2200 — certifying that working from home is a condition of employment. Without that form, the claim would be rejected, said the CRA.

But that was before the pandemic hit.

In March, as COVID-19 began to spread in Canada, public health authorities urged Canadians to stay home. Governments issued orders closing non-essential businesses and employers across the country began telling employees who could do their jobs remotely to work from home.

By mid-April, 3.3 million Canadians had moved out of their regular workplaces and were working from home, according to Statistics Canada’s June Labour Force Survey. While that number dropped by 400,000 in June, millions of Canadians are still working from home.

Some employers, like Ottawa-based Shopify, have told employees they can work from home indefinitely.

By September, those sent home to work in March will have worked at least half the year at home — potentially putting them in a position to qualify for the deduction.

“We’re getting further and further along in this pandemic where a lot of employees are going to have exceeded the six-month mark, and in that situation they should qualify,” said Minicucci.

“But for those employees that have not worked the full six months or more at home, there’s a question with respect to whether or not they meet the eligibility criteria.”

Whether those who haven’t worked a full six months from home will be allowed to claim the deduction is one of the questions Canada’s tax experts have asked the CRA to clarify, said Minicucci.

Keep those receipts

Even if some of those working from home end up falling short of the six-month benchmark, they can still deduct the cost of many of the supplies they have had to consume to get the job done, he said.

“You’re looking at things like pens, paper, ink cartridges for your printer at home,” he said. “Those are items that are consumed. Capital items, unfortunately, are not deductible. So if you buy a printer, not deductible. If you buy a laptop, not deductible. Those are capital items.

“But if you buy items that are being consumed during the course of performing your employment duties, they are deductible. The 50 per cent criteria is not a condition in order to claim expenses for items that you consumed while performing your duties at home.”

An employee works from home over the Zoom platform. Accountants are asking the federal government to clarify the rules on claiming the home office deduction. (Gabby Jones/Bloomberg)

Minicucci said now is a good time to talk with your employer about updating your employment contract, and to keep track of your receipts.

The pandemic has raised a number of questions that Canada’s tax experts have asked the CRA to clarify, he added.

For example, will the CRA require each person to have a formal employment contract? Given the stay at home orders, should meeting clients through videoconference or teleconference platforms from home count as “meeting clients at home”? Should the CRA relax the rule that says you can’t claim internet as a work-from-home expense because it’s considered a fixed cost?

A lot of paperwork for employers

The Chartered Professional Accountants of Canada (CPA Canada) also anticipates an increase in the number of Canadians claiming the home workspace deduction for the first time, and is also calling for the CRA to clarify several questions.

For example — should the CRA still require employers to fill out a T2200 form for every employee they asked to work at home?

“Employers will now be required to complete a great number of T2200s,” CPA Canada said in a background paper. “This will add a significant administrative burden for employers. To alleviate the burden, consideration should be given to using an alternative method to simplify the process for the pandemic.”

CPA Canada said it would like the CRA to clarify whether the “more than 50 per cent of the time” benchmark is calculated for the tax year, or for the period the employee was required to work from home. It also said the CRA should consider simplifying the process by allowing taxpayers to claim a per diem deduction for costs related to working from home.

No rule changes planned, says Finance

However, officials from the CRA and the Finance Department told CBC News there are no plans currently to change the rules on the home workspace deduction.

Conservative revenue critic Marty Morantz is calling on the government to clarify its plans for the deduction, and has put questions about the deduction on the House of Commons’ order paper. He said those who have been working from home should be allowed to claim the deduction.

“I think it would be very reasonable for the government to say to folks who were doing their best to comply during the crisis by working at home, and incurring expenses, that they should have the opportunity to claim the deduction,” he said.

Aaron Wudrick, federal director of the Canadian Taxpayers Federation, agreed.

“The deduction exists for a reason — to defray work-related costs that just happen to be home-related and if that reason now applies to a broader class of people, they should be able to make use of it,” he said.

Elizabeth Thompson can be reached at elizabeth.thompson@cbc.ca

Let’s block ads! (Why?)



Source link

News

NDP to join Bloc in defeating Conservatives’ non-confidence motion

Published

 on

OTTAWA – The New Democrats confirmed Thursday they won’t help Pierre Poilievre’s Conservatives topple the government next week, and intend to join the Bloc Québécois in blocking the Tories’ non-confidence motion.

The planned votes from the Bloc and the New Democrats eliminate the possibility of a snap election, buying the Liberals more time to govern after a raucous start to the fall sitting of Parliament.

Poilievre issued a challenge to NDP Leader Jagmeet Singh earlier this week when he announced he will put forward a motion that simply states that the House has no confidence in the government or the prime minister.

If it were to pass, it would likely mean Canadians would be heading to the polls, but Singh said Thursday he’s not going to let Poilievre tell him what to do.

Voting against the Conservative motion doesn’t mean the NDP support the Liberals, said Singh, who pulled out of his political pact with Prime Minister Justin Trudeau a few weeks ago.

“I stand by my words, Trudeau has let you down,” Singh said in the foyer outside of the House of Commons Thursday.

“Trudeau has let you down and does not deserve another chance.”

Canadians will have to make that choice at the ballot box, Singh said, but he will make a decision about whether to help trigger that election on a vote-by-vote basis in the House.

The Conservatives mocked the NDP during Question Period for saying they had “ripped up” the deal to support the Liberals, despite plans to vote to keep them in power.

Poilievre accused Singh of pretending to pull out of the deal to sway voters in a federal byelection in Winnipeg, where the NDP was defending its long-held seat against the Conservatives.

“Once the votes were counted, he betrayed them again. He’s a fake, a phoney and fraud. How can anyone ever believe what the sellout NDP leader says in the future?” Poilievre said during Question Period Thursday afternoon.

At some point after those comments, Singh stepped out from behind his desk in the House and a two-minute shouting match ensued between the two leaders and their MPs before the Speaker intervened.

Outside the House, Poilievre said he plans to put forward another non-confidence motion at the next opportunity.

“We want a carbon-tax election as soon as possible, so that we can axe Trudeau’s tax before he quadruples it to 61 cents a litre,” he said.

Liberal House leader Karina Gould says there is much work the government still needs to do, and that Singh has realized the consequences of potentially bringing down the government. She refused to take questions about whether her government will negotiate with opposition parties to ensure their support in future confidence motions.

Bloc Québécois Leader Yves-François Blanchet hasn’t ruled out voting no-confidence in the government the next time a motion is tabled.

“I never support Liberals. Help me God, I go against the Conservatives on a vote that is only about Pierre Poilievre and his huge ambition for himself,” Blanchet said Thursday.

“I support the interests of Quebecers, if those interests are also good for Canadians.”

A Bloc bill to increase pension cheques for seniors aged 65 to 74 is now at “the very centre of the survival of this government,” he said.

The Bloc needs a recommendation from a government minister to OK the cost and get the bill through the House.

The Bloc also wants to see more protections for supply management in the food sector in Canada and Quebec.

If the Liberals can’t deliver on those two things, they will fall, Blanchet said.

“This is what we call power,” he said.

Treasury Board President Anita Anand wouldn’t say whether the government would be willing to swallow the financial implications of the Bloc’s demands.

“We are focused at Treasury Board on ensuring prudent fiscal management,” she said Thursday.

“And at this time, our immediate focus is implementing the measures in budget 2024 that were announced earlier this year.”

This report by The Canadian Press was first published Sept. 19, 2024.



Source link

Continue Reading

News

Anita Anand sworn in as transport minister after Pablo Rodriguez resigns

Published

 on

OTTAWA – Treasury Board President Anita Anand has been sworn in as federal transport minister at a ceremony at Rideau Hall, taking over a portfolio left vacant after Pablo Rodriguez resigned from cabinet and the Liberal caucus on Thursday.

Anand thanked Rodriguez for his contributions to the government and the country, saying she’s grateful for his guidance and friendship.

She sidestepped a question about the message it sends to have him leave the federal Liberal fold.

“That is a decision that he made independently, and I wish him well,” she said.

Prime Minister Justin Trudeau was not present for the swearing-in ceremony, nor were any other members of the Liberal government.

The shakeup in cabinet comes just days after the Liberals lost a key seat in a Montreal byelection to the Bloc Québécois and amid renewed calls for Prime Minister Justin Trudeau to step down and make way for a new leader.

Anand said she is not actively seeking leadership of the party, saying she is focused on her roles as minister and as MP.

“My view is that we are a team, and we are a team that has to keep delivering for our country,” she said.

The minority Liberal government is in a more challenging position in the House of Commons after the NDP ended a supply-and-confidence deal that provided parliamentary stability for more than two years.

Non-confidence votes are guaranteed to come from the Opposition Conservatives, who are eager to bring the government down.

On Thursday morning, Rodriguez made a symbolic walk over the Alexandra Bridge from Parliament Hill to Gatineau, Que., where he formally announced his plans to run for the Quebec Liberal party leadership.

He said he will now sit as an Independent member of Parliament, which will allow him to focus on his own priorities.

“I was defending the priorities of the government, and I did it in a very loyal way,” he said.

“It’s normal and it’s what I had to do. But now it’s more about my vision, the vision of the team that I’m building.”

Rodriguez said he will stay on as an MP until the Quebec Liberal leadership campaign officially launches in January.

He said that will “avoid a costly byelection a few weeks, or months, before a general election.”

The next federal election must be held by October 2025.

Conservative Leader Pierre Poilievre said he will try to topple the government sooner than that, beginning with a non-confidence motion that is set to be debated Sept. 24 and voted on Sept. 25.

Poilievre has called on the NDP and the Bloc Québécois to support him, but both Jagmeet Singh and Yves-François Blanchet have said they will not support the Conservatives.

Rodriguez said he doesn’t want a federal election right away and will vote against the non-confidence motion.

As for how he would vote on other matters before the House of Commons, “it would depend on the votes.”

Public Services and Procurement Minister Jean-Yves Duclos will become the government’s new Quebec lieutenant, a non-cabinet role Rodriguez held since 2019.

This report by The Canadian Press was first published Sept. 19, 2024.

— With files from Nojoud Al Mallees and Dylan Robertson

The Canadian Press. All rights reserved.



Source link

Continue Reading

News

Political parties cool to idea of new federal regulations for nomination contests

Published

 on

OTTAWA – Several federal political parties are expressing reservations about the prospect of fresh regulations to prevent foreign meddlers from tainting their candidate nomination processes.

Elections Canada has suggested possible changes to safeguard nominations, including barring non-citizens from helping choose candidates, requiring parties to publish contest rules and explicitly outlawing behaviour such as voting more than once.

However, representatives of the Bloc Québécois, Green Party and NDP have told a federal commission of inquiry into foreign interference that such changes may be unwelcome, difficult to implement or counterproductive.

The Canada Elections Act currently provides for limited regulation of federal nomination races and contestants.

For instance, only contestants who accept $1,000 in contributions or incur $1,000 in expenses have to file a financial return. In addition, the act does not include specific obligations concerning candidacy, voting, counting or results reporting other than the identity of the successful nominee.

A report released in June by the National Security and Intelligence Committee of Parliamentarians expressed concern about how easily foreign actors can take advantage of loopholes and vulnerabilities to support preferred candidates.

Lucy Watson, national director of the NDP, told the inquiry Thursday she had concerns about the way in which new legislation would interact with the internal decision-making of the party.

“We are very proud of the fact that our members play such a significant role in shaping the internal policies and procedures and infrastructure of the party, and I would not want to see that lost,” she said.

“There are guidelines, there are best practices that we would welcome, but if we were to talk about legal requirements and legislation, that’s something I would have to take away and put further thought into, and have discussions with folks who are integral to the party’s governance.”

In an August interview with the commission of inquiry, Bloc Québécois executive director Mathieu Desquilbet said the party would be opposed to any external body monitoring nomination and leadership contest rules.

A summary tabled Thursday says Desquilbet expressed doubts about the appropriateness of requiring nomination candidates to file a full financial report with Elections Canada, saying the agency’s existing regulatory framework and the Bloc’s internal rules on the matter are sufficient.

Green Party representatives Jon Irwin and Robin Marty told the inquiry in an August interview it would not be realistic for an external body, like Elections Canada, to administer nomination or leadership contests as the resources required would exceed the federal agency’s capacity.

A summary of the interview says Irwin and Marty “also did not believe that rules violations could effectively be investigated by an external body like the Office of the Commissioner of Canada Elections.”

“The types of complaints that get raised during nomination contests can be highly personal, politically driven, and could overwhelm an external body.”

Marty, national campaign director for the party, told the inquiry Thursday that more reporting requirements would also place an administrative burden on volunteers and riding workers.

In addition, he said that disclosing the vote tally of a nomination contest could actually help foreign meddlers by flagging the precise number of ballots needed for a candidate to be chosen.

Irwin, interim executive director of the Greens, said the ideal tactic for a foreign country would be working to get someone in a “position of power” within a Canadian political party.

He said “the bad guys are always a step ahead” when it comes to meddling in the Canadian political process.

In May, David Vigneault, director of the Canadian Security Intelligence Service at the time, said it was very clear from the design of popular social media app TikTok that data gleaned from its users is available to the Chinese government.

A December 2022 CSIS memo tabled at the inquiry Thursday said TikTok “has the potential to be exploited” by Beijing to “bolster its influence and power overseas, including in Canada.”

Asked about the app, Marty told the inquiry the Greens would benefit from more “direction and guidance,” given the party’s lack of resources to address such things.

Representatives of the Liberal and Conservative parties are slated to appear at the inquiry Friday, while chief electoral officer Stéphane Perrault is to testify at a later date.

After her party representatives appeared Thursday, Green Leader Elizabeth May told reporters it was important for all party leaders to work together to come up with acceptable rules.

This report by The Canadian Press was first published Sept. 19, 2024.



Source link

Continue Reading

Trending

Exit mobile version