CRA Update: Work-From-Home COVID-19 Tax Break

With thousands of Canadians working from home, many stay-at-home workers may be wondering if they qualify for the CRA deduction.

| More on:

While the COVID-19 pandemic shut down businesses, many employees found themselves working from home. Fortunately, the CRA provides tax benefits to deduct home-office expenses.

To qualify for the deduction, the CRA requires one of the following:

  1. The workspace is where you do your work more than 50% of the time; or
  2. The workspace is used only to earn employment income and used on a regular and continuous basis for meeting clients, customers, or others in the course of your employment.

With thousands of Canadians working from home, many stay-at-home workers may be wondering if they qualify for the deduction.

There is good news.

Although there are strict requirements taxpayers must meet to claim the benefit, the CRA may be considering cases on an individual basis.

In an article recently published in The Globe and Mail, Denise Batac, partner at Crowe Soberman LLP’s tax group, advised Canadians who are new to the work-from-home experience to keep detailed records of their work-related expenses.

Ms. Batac says “the more than 50-per-cent rule” extends to the taxation year. However due to the pandemic, people may be working from home for only a portion of the year. Therefore, the CRA will consider cases on an individual basis.

Who qualifies for the deduction?

According to the CRA, there are three types of workers who may qualify. These include employees, commissioned salespeople, and self-employed workers.

Deductible expenses typically include home maintenance and supplies and utilities, such as heating and electric. Commissioned salespeople and self-employed workers can claim property taxes and home insurance. Self-employed workers may also claim a portion of their mortgage and capital cost allowance.

For more detailed information about whether you can deduct certain expenses, consult the CRA directly or seek advice from an accounting professional.

COVID-19 Economic Response Plan

In mid-March, the Government of Canada began rolling out its COVID-19 Economic Response Plan. These measures are designed to help Canadians who have been financially impacted by the global COVID-19 pandemic. Since the rollout, new measures have been introduced and previously announced programs have been enhanced.

If you have received payment as part of the government’s COVID-19 Economic Response Plan, you may consider investing a portion of the money.

Consider an investment in Enbridge (TSX:ENB)(NYSE:ENB), the largest pipeline operator in North America. The company moves approximately 25% of the crude oil produced in North America and transports almost 20% of the natural gas consumed in the U.S.

Enbridge

As of this writing, shares of Enbridge are trading at $42.16. At this price, the dividend yield is a hefty 7.76%.

Enbridge has consistently grown its dividend for 24 consecutive years. The stability of its dividend comes from the fact that more than 95% of Enbridge’s cash flow comes from low-volatility sources directly tied to its pipeline operations.

While recent volatility has disrupted the sector, pipeline stocks have proven to be very profitable over the long term. For example, Enbridge stock traded for less than $4 per share in 1995. Today, those shares are well above $40.

If you are a long-term investor looking for reliability, it’s hard to beat Enbridge.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Cindy Dye owns shares of ENBRIDGE INC. The Motley Fool owns shares of and recommends Enbridge.

More on Energy Stocks

Pumpjack in Alberta Canada
Energy Stocks

Is Imperial Oil Stock a Buy, Sell, or Hold for 2025?

Imperial Oil stock is in a precarious position, so what should investors consider as we head nearer to 2025?

Read more »

construction workers talk on the job site
Energy Stocks

Is Suncor Stock a Buy, Sell, or Hold for 2025?

Suncor Energy stock is trading at its decade-high on uncertainty in the oil market. Should you buy, sell, or hold…

Read more »

four people hold happy emoji masks
Energy Stocks

If You Like Exxon Mobil, Then You’ll Love These High-Yield Oil Stocks 

Here are three high-yield oil stocks with the potential to outperform over the medium to long-term.

Read more »

bulb idea thinking
Energy Stocks

2 No-Brainer Utility Stocks to Buy Now for Under $1,000

Canadian Utilities (TSX:CU) is a utility stock that may be worth a look in late 2024.

Read more »

dividend growth for passive income
Energy Stocks

Enbridge Stock: Buy, Sell, or Hold?

With a dividend yield of 6.4% and strong long-term growth profile, let's take a look at the investment case for…

Read more »

construction workers talk on the job site
Energy Stocks

Mattr Stock: Why Now Is the Time to Buy This Undervalued Gem

A top but undervalued growth stock is a buying opportunity today.

Read more »

sources of renewable energy
Dividend Stocks

Want Passive Income? This 5.4% Dividend Stock Pays Cash Every Month

This dividend stock doesn't just have a strong monthly dividend -- it also has an excellent future outlook.

Read more »

oil pump jack under night sky
Energy Stocks

Is Baytex Energy Stock a Good Buy?

Baytex Energy is a beaten-down TSX Energy stock that trades at a reasonable valuation in October 2024.

Read more »