![]() As the CRA website explains, “Individuals can choose to claim a deduction for repayments made before Januof certain COVID-19 benefit amounts they were not entitled to receive (or chose to repay) on their income tax and benefit return (the return) for the year they received the benefit rather than on the return for the year they repaid the benefit. The tax treatment of COVID-19 benefit amounts has received Royal Assent. With regard to employer-provided parking, the CRA now specifies that the relief applies “when a regular place of employment is closed due to COVID-19, including situations where employees have been sent home by the employer or have been given the option to work from home on a full-time basis due to the pandemic, employer-provided parking at the regular place of employment will not be considered a taxable benefit by the CRA.” COVID-19 BENEFITS (An accountable allowance is one where the employee must produce receipts to account for the expense and return any amount they did not spend.) Accountable allowances are also eligible for the equipment reimbursement rule. The CRA website explains: “For example, if an employee purchases a computer for $400 in 2020 and an office chair for $250 in 2021 that they will keep after the pandemic and are fully reimbursed, the amount over $500 (that is, $150) must be included in the employee’s income in 2021.” The maximum reimbursement per employee for home office equipment is $500 and this limit applies to the entire period (i.e., Mato December 31, 2022). Tax news: CRA makes further updates to guidance on employee benefits due to COVID-19 (CPA Canada news item: January 18, 2022).However, some additional relief has been announced. Generally speaking, the original announcement relating to 2020 will now apply from Mato December 31, 2022. The CRA has given an update on how to apply the administrative rules it introduced last year to provide relief on employment benefits for 20. “No forms are required from the employer, and the employee only needs to track the days worked at home and to use Form T777S.” EMPLOYER-PROVIDED BENEFITS AND ALLOWANCES While each situation is unique, the temporary flat rate method is simpler to use, says CPA Vivian Leung, principal, taxation at CPA Canada. Tax blog: Government extends temporary rules for employee home office expenses in 2021. ![]() They must then receive a signed T2200 or T2200S form from their employer and complete the detailed method section of Form T777S. To calculate the deduction, employees must first determine the total of their eligible expenses overall and then prorate these expenses based on the portion of their home used for employment. Under the detailed method, employees can claim the employment portion of the actual home office expenses paid and the calculations are essentially the same as for employees who are required to work at home generally. The temporary flat rate method allows eligible employees to claim a deduction of $2 for each day worked from home in 2021 due to COVID-19, up to a maximum of 250 days or $500. The simplified guidelines introduced in 2021 (2020 taxation year) for employees working from home due to COVID-19 have been extended and two methods to determine the deduction will continue to be available to them. Update: Although we have asked CRA to confirm, it now appears that this change will apply on Janubased on draft legislation released on Febru*. Moreover, time is needed for CRA to consult with stakeholders to ensure concerns can be considered and addressed.” “Tax software developers may need to update their products and tax preparers may need to change their practices. “This is a change that will have a significant impact on taxpayers and preparers,” says Ball. But it would be even more helpful if the implementation is deferred at least until the fall. This is welcome news, says FCPA Bruce Ball, CPA Canada’s vice-president of taxation. While it appeared at one point that this change would be implemented for the 2022 busy season, the government has now clarified that it will not come into effect until July 2022. These include changes that will allow the CRA to send notices of assessment electronically for individuals who file their T1 return electronically and for those who employ the services of a tax preparer that files their T1 electronically. To improve the Canada Revenue Agency’s ability to operate digitally, the 2021 budget included proposals that would significantly change how it communicates with taxpayers and their advisers. Here are some of the main administrative and legislative changes to keep in mind as we move into busy season. The simplified guidelines introduced in 2021 for employees working from home due to COVID-19 have been extendedĮvery year brings its share of tax updates and 2021 was no different.
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