Canada is known for its citizen-oriented policies and continually ranks as one of the world’s happiest countries. Contributing to this are some laws and regulations designed to make life a little better for the average person.
The new work-from-home tax credit from the Canadian government is one of these policies. Many Canadians aren’t sure how they can claim these benefits – and that’s why we’re here to help.
Since many companies have been forced to shut down their offices or facilities at one point or another during the global COVID pandemic, this taxation policy is designed to help ensure that the employers are getting the breather they need.
What Is the New Policy?
The new policy will help taxpayers work from home with tax deductions.
Since these are pretty tough times for all of us, both personally and economically, these tax deductions offer the much-needed wiggle room for both employers and the workforce, saving the country from an HR nightmare waiting to happen.
We here at V-TAC believe that this will have a significant, positive impact on almost all of Canada’s entrepreneurs, solopreneurs, and small businesses.
How does it help employers and employees?
Working from home isn’t as easy as working in the office, as you have to handle most things yourself, and there are some work-from-home expenses.
Most employers through that had to fill out T22001 forms to enable work-from-home expenses, which would cost more than C$194 million collectively, significantly burdening both employers and payroll workers working from home.
No one likes paying taxes, especially if they can’t hide behind a mega-corporation.
Small businesses are jeopardized as a result of the pandemic, and every tax relief is massively beneficial. Luckily, the government has announced that work-from-home employees will be able to claim up to C$400 for 2020 without having to track detailed expenses.
Diane Lebouthillier, Minister of National Revenue, introduced this policy to streamline, simplify, and ease the burden on millions of Canadians’ shoulders.
How Can I Get In On This Money?
Employees get a tax break, and employers won’t have to fill out complex and costly T22011 forms.
This still begs the question of how you, as a small business owner, employee or entrepreneur, can benefit from these tax reliefs. Well, you’ll need to fit the following criteria.
● You would have had to work from home in 2020 due to the pandemic
● You had worked from home at least 50% of the time for at least four weeks in a row in 2020
● You’ve filled out and signed the T2200S or T2200 Form from your employer
● The expenses you’re trying to claim are used directly in your work during the timeframe
After you’re done with the paperwork, all you need to do is submit the application and enjoy the tax cuts.
The Bottom Line
The COVID-19 pandemic has certainly taken its toll. With the new federal tax credit for working from home, Canadian small businesses, entrepreneurs and solopreneurs can get a little help from the government.
If you want to learn more about how you can gain a little back from this otherwise-unfortunate situation, and the measures put in place to relieve it, make sure to contact V-TAC Payroll Management today and find out more about what we can do to turn this corona-induced rough ride into smooth sailing.
V-TAC Payroll Management can help small businesses and entrepreneurs alike with almost all their payment and payroll needs – and since the pandemic has wreaked havoc on more than a few small businesses, we believe our helping hand might just do the trick.