If you maintain a home office and attempt to write off a portion of your expenses at income tax time, a Tax Court decision released last month may give you reason to review the rules to ensure that your home office expenses are legitimately deductible.
Under the Income Tax Act, there are two sets of rules that govern home office expense deductibility: one for employees and one for the self-employed.
For employees, if the workspace in your home is the location where you “principally” (more than 50 per cent of the time) perform your duties of employment and you are “required by the contract of employment” to maintain such an office, you can deduct certain home-office expenses. This requirement must be certified by your employer on Form T2200, “Declaration of Conditions of Employment,” which need not be filed with your return, but must be kept in case the Canada Revenue Agency wants to see it.
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