The Tax Blog for Smart Canadians

Home office expenses due to the COVID-19 pandemic

In late December, the federal government introduced a simplified process for claiming home office expenses: the temporary flat rate method.

You are eligible to use this new method if you worked from home more than 50% of the time for a period of at least four consecutive weeks in 2020 due to COVID-19. You can claim $2 for each day that you worked from home during that period, plus any additional days you worked from home in 2020 due to COVID-19, up to a maximum of $400.

If it’s more beneficial, you also have the option to use the detailed method instead, and claim your itemized home office expenses. In that case, your employer has to complete the T2200S form and give you a copy, thereby confirming that you are required to work from home.

You can claim this deduction through the T777S form.

We published a detailed article on this topic in a recent blog post.

Canada Training Credit

The Canada Training Credit (CTC) is a new refundable tax credit based on your eligible tuition fees. The amount you can claim is the lesser of:

• half of the eligible tuition and other fees paid in respect of the year, and
• your Canada training credit limit for the taxation year.

Starting in 2019, you can accumulate a $250 per year limit towards the Canada Training Credit.

To accumulate the $250 limit, you must meet all of the following conditions:

• file a tax return for the year;
• be at least 25 years old and less than 65;
• be resident in Canada throughout the year;
• have a total of $10,000 or more of income from:
  • maternity and parental benefits;
  • working income (income from an office or employment, business income, the taxable part of scholarship income and research grants, the tax-exempt part of earnings of status Indians and emergency service volunteers, and income under the Wage Earner Protection Program Act);
• have individual net income for the year that does not exceed the top of the third tax bracket in that year ($150,473 in 2020).

The lifetime limit you can accumulate is $5,000.

No double-dipping is allowed, so keep in mind that the amount you claim for this credit will be subtracted from the amount of tuition fees you can claim for the tuition tax credit.

Digital news subscription expenses

You can claim a non-refundable tax credit of up to $500 for fees paid to a qualified Canadian journalism organization (QCJO) that does not hold a license to broadcast, for a digital news subscription to content that is primarily original news.

Only the cost of a comparable stand-alone digital subscription to the content of the QCJO will be eligible. If there is no comparable stand-alone digital subscription, then only half of the amount paid is eligible.

Enhanced Basic Personal Amount

The Basic Personal Amount (BPA), which is the non-refundable tax credit to which every resident of Canada is entitled, has been increased to $13,229 if your net income is below $150,473. This amount is now progressively reduced if your income is above $150,473, then capped to $12,298 if your net income is above $214,368.

Quebec

Harmonization with the federal measures for home office expenses

The Quebec government has announced the implementation of the measures introduced by the federal government regarding home office expenses (see above).

Tax credit for caregivers

The tax credit for caregivers has been simplified from four components into two:

• caregivers providing care to a person aged 18 or over who has a severe and prolonged impairment and needs assistance in carrying out a basic activity of daily living
• caregivers providing care to, and living with a relative aged 70 or over

The definition of an eligible care receiver has been extended to include someone with whom you have no family relationship, if a professional from the health and social services network certifies that you provide ongoing assistance to this person so that he or she can carry out a basic activity of daily living. The form required to claim this new type of receiver is the TP-1029.AN.A.

Virtual currency transactions

A new section has been added to the tax return’s capital gains and losses schedule in order to report any transactions made with virtual currency (e.g. Bitcoin, Ethereum, Ripple, etc.). A new box has also been added on the tax return to enter any virtual currency received or disposed of during the year.

Categories

Last Blog posts