- Who is a T2200 for?
- What is a T2200?
- Why should employers issue a T2200?
- When do you need to issue a T2200?
- How do you issue a T2200?
Who is a T2200 for?
Typically, sales people or other employees who are required to work from home and/or cover their own expenses as a condition of employment can claim employment related expenses. A T2200 form is a Canada Revenue Agency (CRA) form that an employer completes and gives to the employee
What is a T2200?
Canada Revenue Agency (CRA) form T2200 Declaration of Conditions of Employment is completed by the employer to certify that an employee is required to work from home and that any employment expenses not reimbursed by the employer may be claimed on their annual tax return. The expenses that can be claimed on the employee’s tax return are dependent on how the employer completes the T2200. A signed T2200 form does not provide an employee with any assurance that expenses incurred are deductible. The eligibility to deduct employment expenses is a matter between the employee and the Canada Revenue Agency. Employees wishing to deduct employment expenses are advised to review the Canada Revenue Agency’s publication on employment expenses (t4044) and/or seek advice from their personal tax consultant.
Why should employers issue a T2200?
T2200 is a great way for employers to allow employees to deduct some legitimate expenses like rent , telephone and internet that they would otherwise not be able to deduct. This can have a significant impact on the amount of taxes the employee pays and provide an added financial benefit to the employee. There is little to no risk for the employer as long as they complete the form in a ways that is consistent with their business operations. e.g. do not tick yes to question 2 if you did not require the employee to travel for work.
When do you need to issue a T2200?
A T2200 needs to be issued for every tax year in which the employee has eligible employment expenses. The T2200 document is not filed with CRA and does not have a filing deadline. This document is only provided to the employee and it is their responsibility to keep a record of this should CRA audit their personal tax return. Since there is no filing deadline for this form it can be completed at any time throughout the year. However, in most situations this form is provided to employees along with a copy of their T4 prior to the T4 filing deadline of February 28th.
How do you issue a T2200?
An employee’s eligibility to claim expenses will have to be examined on a case-by-case basis. In order to claim such expenses, employee’s contracts of employment must require that they pay their own expenses while carrying out their duties. According to the Canada Revenue Agency, this is normally, but not necessarily set out in written letters of offer, employment policies, or collective agreements.
The Form T2200 must be signed by a Director or signing authority of the employer. The Form T2200 can only be signed when the conditions for each type of expenditure, as set out later in this document, are met.
Individuals approving Form T2200’s should take the time and effort to understand the exact nature of the expenses being claimed and must ensure that the questions on the Form T2200 are answered accurately and truthfully. Failure to do so may be considered an offence under the Income Tax Act and persons found guilty of an offence may be subject to fines and imprisonment.
- Employees can provide a draft, completed T2200 form to their employer for approval, together with a brief written statement outlining the type of expenses incurred and the basis for requesting the form T2200. The form can be found at: https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2200.html
- The employer should review the form carefully in the context of the responsibilities of the employee. The list of expenses should be reviewed against those eligible for reimbursement under any of the employers reimbursement programs.
- The employer is under no obligation to sign the form and should contact their accountant for advice if they have any questions. The employer is not required to determine the deductibility of the expenses. They are only required to certify that the employment arrangement requires the employee to incur the expenses without subsequent reimbursement.
- If the form is signed, a copy of the completed form should be kept in the employee’s personnel file.
Do you have more questions about the T2200? Contact us to learn more.
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