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Employment expenses (T777)

Updated: 2017-12-22

T2200 Declaration of conditions of employment

The employer must complete the T2200 to allow the employee to deduct employment expenses. You can complete this form in TaxCycle, but the amounts are not used in calculating the tax return. Keep the employee’s original form in case the CRA needs it. 

If you are filling T4 slips for an organization, you can create T2200 forms for their employees along with the T4 slips. See the T2200 Conditions of employment help topic.

T777WS Employment Expenses worksheet

  1. Enter the details of employment expenses on the T777WS. The amounts from this worksheet flow to the T777 and GST370 forms, if the taxpayer is claiming the GST/HST rebate on the expenses.
  2. Since each T777WS is associated with a T4 slip, create the slip first, making sure to enter any commissioned income in box 42.
  3. Select the T4 slip from the top of the T777WS.
  4. Indicate whether the employee is eligible for the GST/HST rebate. If yes, enter the Employer GST/HST number.
  5. Enter expenses. If the employee is claiming the GST/HST rebate, enter the amounts, including tax, in the appropriate column.
  6. If they are not claiming the rebate, use the Not eligible column.
  7. If the expenses were incurred in more than one province, or there was a tax rate change, split the expenses into separate columns.
  8. For entertainment, food and beverage, enter the full amount. TaxCycle automatically calculates the 50% non deductible portion.
  9. Some expenses are only eligible for commission-paid employees. If the taxpayer did not earn commissions, you can ignore these rows.

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Calculating the claim

  1. The allowable credits for salaried and commission-paid employees are based on the information entered in the expenses table and on the T4 slip.
  2. You can choose what type of claim to make: as salaried employee (default) or as commission-paid employee. The calculation of each type appears on the right so you can compare the results.
  3. If no commission appears in box 42 of the T4 slip, the commission-paid expense claim is not calculated.
  4. If the employee has both salary and commission income, you can check the box to claim the higher of the two amounts.

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Claiming CCA for expenses of employed artists

  1. Go the CCA table in the Expenses of employed artists section.
  2. Enter the undepreciated capital cost (UCC) in column 2. This amount is carried forward from the prior year if available.
  3. Enter the amount of any additions made during the year in column 4.
  4. Enter the proceeds of dispositions in column 5.
  5. If the expense is eligible for the GST/HST rebate, enter the amount of the GST/HST rebate in column 3 and select the tax rate from the menu in column 12.
  6. In column 14, enter the portion of  the amount from column 4 that was acquired after November 20, 2018. This amount is then used to calculation the accelerated CCA. To learn more about accelerated CCA calculations read the Accelerated CCA help topic.
  7. When you enter a disposition, TaxCycle first applies the amount to any Non AIIP additions in column 15. If there is a remaining disposition amount, it is then applied to AIIP additions in column 16

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