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Employment Expenses (T777)

Updated: 2022-01-18

T2200 and T2200S Forms

The employer must complete and sign the T2200S, Declaration of Conditions of Employment for Working at Home Due to COVID-19, if an employee chooses to use the detailed method to calculate their home office expenses (workspace-in-the-home and supplies) while working at home during the pandemic. Claims using the rate method do not require a T2200S (see below).

If the employee pays for expenses other than home office expenses, do not use the T2200S. Instead, complete form T2200, Declaration of Conditions of Employment.

If you are filling T4 slips for an organization, you can create T2200 and T2200S forms for their employees along with the T4 slips. See the T2200 Conditions of Employment help topic.

You can also add details from these forms to the return in TaxCycle T1. However, TaxCycle will not use the amounts in calculating the tax return. Keep the employee’s original form in case the CRA requests it.

Working at Home Due to COVID-19

Employees who had to work from home due to COVID-19 may be eligible to claim home office expenses using form T777S. They can use either the temporary flat rate method or the detailed method to claim office expenses. The detailed method requires them to obtain a signed copy of form T2200S from their employer.

Revenu Québec uses a similar form, TP-59.S-V, Expenses Related to Working Remotely Because of the COVID-19 Pandemic, to calculate the claim on TP1 returns.

To claim expenses for working at home due to COVID-19:

  1. Check the T777S (COVID) box at the top of the T777WS employment expenses worksheet.Screen Capture: Which statement of employment expenses do you want to complete?
  2. Open the T777S and choose the calculation method: option 1, temporary flat rate, or option 2, detailed method.
  3. If you choose option 1, temporary flat rate, enter the total number of days the person worked from home during the year due to COVID-19. TaxCycle will calculate the claim and enter it on line 22900 of the return.
    Screen Capture: Option 1 - Temporary flat rate method
  4. If you choose option 2, detailed method, review the eligible and non-eligible expenses on page 1 of the T777S, and make sure the client meets the criteria listed at the top of page 2.
  5. Enter the details of the expenses on the T777WS (see below). The amounts flow back to the T777S to calculate the claim, then to line 22900 of the T1 return.
    Screen Capture: Option 2 - Detailed method

T777WS Employment Expenses Worksheet

Use the T777WS to calculate an employment expense claim. Amounts from this worksheet flow to related schedules, T777, T777S, TP-59-V and TP-59.S-V. Amounts also flow to the GST370 if the taxpayer is claiming the GST/HST rebate on the expenses.

  1. Each T777WS has an associated T4 slip. First create the T4 slip and the slip first and enter the employment income and source deductions.
  2. Make sure to enter any commissioned income in box 42 on the T4 slip.
    Screen Capture: T4 Slip with Commission Income
  3. Select the related T4 slip at the top of the T777WS.
  4. Indicate whether the employee is eligible for the GST/HST rebate.
  5. If the employee is claiming the GST/HST rebate, enter the employer GST/HST registration number.
  6. Enter expenses in the table provided. If the employee is claiming the GST/HST rebate, enter the amounts, including tax, in the appropriate column. If the expenses were incurred in multiple provinces, or the tax rate changed, split the expenses into separate columns.
  7. Use the Not eligible column if the employee is not claiming the GST/HST rebate.
  8. Enter motor vehicle expenses on the Motor Vehicle worksheet and allocate the kilometrage to the T777WS on that form. Amounts will automatically flow to the T777WS. See the Motor Vehicle Expenses help topic.
  9. For entertainment, food and beverage, enter the full amount. TaxCycle automatically calculates the 50% non-deductible portion.
  10. Some expenses only apply to commission-paid employees. If your client did not earn commissions, you can ignore these rows.
  11. Scroll down the form to enter expenses for workspace in the home, tools for tradespeople or apprentice mechanics, employed artists and forestry workers.
    Screen Capture: Expenses of salaried or commission-paid employees

Claim Calculation

TaxCycle calculates the maximum claim for salaried and commission-paid employees based on the information entered on the T777WS and on the T4 slip.

  1. You can choose how to calculate the claim: as salaried employee (default) or as commission-paid employee. The calculation of each type appears on the right so you can compare the results.
  2. If box 42 on the T4 slip is zero, TaxCycle does not calculate commission-paid expense claim.
  3. If the employee has both salary and commission income, you can check the box to claim the higher of the two amounts.
    Screen Capture: Maximum Claim Per Type of Employee and Selection of Claim Method

CCA Claims for Expenses of Employed Artists

Go the CCA table in the Expenses of employed artists section:

  1. Enter the undepreciated capital cost (UCC) in column 2. If available, TaxCycle will carry forward this amount from the previous year.
  2. Enter any additions made during the year in column 4.
  3. Enter the proceeds of dispositions in column 5.
  4. 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.
  5. In column 14, enter the portion of the amount from column 4 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.
  6. When you enter a disposition, TaxCycle first applies the amount to any Non AIIP dispositions in column 15. Any remaining disposition amount is applied to AIIP dispositions in column 16.
    Screen Capture: CCA for Expenses of Employed Artists