Statement of employment expenses (T777 and TP-59-V)

Yes! Whether you worked from your home office or your kitchen table, two new methods have been introduced to make it easier for you to claim your home office expenses this year if you worked remotely due to COVID-19:

• Temporary flat rate method - You can claim $2 for each day you worked from home, up to a maximum of $400. In other words, you can claim up to 200 days. You won’t need supporting documents such as a signed T2200S (or TP-64.3-V, if you’re a Québec resident) form from your employer or receipts for your home office expenses. More than one person can also claim the same workspace, and you won’t need to divide the amount between you.

• Detailed method – Use this method if you want to claim the amount you actually paid for your home office expenses. You’ll need receipts for your eligible expenses and a signed T2200S (and TP-64.3-V, if you’re a Québec resident).

Check out this help article for more information on which method you should use and where to claim your home office expenses, if you worked from home due to COVID-19.

In order to claim employment expenses, you must have a completed and signed T2200: Declaration of conditions of employment form from your employer indicating the expenses you were required to pay as part of your conditions of employment.

If you are also filing a Québec return, your employer will need to give you a completed and signed copy of one or more of the following forms:

• If you’re a salaried employee or an employee earning commissions - form TP-64.3-V (General Employment Conditions) to claim a deduction for motor-vehicle expenses and travel expenses, cost of supplies, expenses related to an office in the home and other expenses, and a few others.
  
  
• If you’re a salaried musician - form TP-64.3-V (General Employment Conditions) to claim a deduction for employment expenses other than the ones related to your musical instrument.
  
  
• If you’re a salaried tradesperson, such as hairdresser, cook, plumber, apprentice mechanic, etc. - form TP-75.2-V (Employment Expenses of Salaried Tradespeople) to claim deductions for your eligible tools.
  
  
• If you’re a forestry worker - form TP-78-V (Employment Expenses of Forestry Workers) to claim a deduction for chain-saw or brush-cutter expenses, snowmobile or all-terrain-vehicle (ATV) expenses, or motor-vehicle expenses.

Note: Be sure to keep the signed form(s) and any receipts and records in case the CRA or Revenu Québec asks for them later.

Important: Did you work from home due to COVID-19? Check out this help article instead for information on how to claim your home office expenses.

You can deduct certain expenses you paid to earn employment income or commissions, provided you were required to pay for these expenses under a contract of employment.

Keep in mind, if you earn commission income, you’ll need to meet the following employment conditions in order to deduct expenses:

1. You had to pay your own expenses under a contract of employment.
2. You were normally required to work away from your employer's place of business.
3. You were paid in whole or in part by commissions or similar amounts. These payments were based on the volume of sales made or the contracts negotiated.
4. You didn’t receive a non-taxable allowance for travelling expenses. Generally, an allowance is non-taxable as long as it’s a reasonable amount. For example, an allowance for the use of a motor vehicle is usually non-taxable when it’s based solely on a reasonable per-kilometre rate.
5. You have a copy of form T2200: Declaration of Conditions of Employment, which has been completed and signed by your employer.

Your employment expenses can include any GST/HST and provincial tax you paid on them. You might be able to claim a GST/HST rebate on these. Click here for more information.

If you’re an employee of a transport business (such as an airline or trucking company), railway company, etc., in addition to the employment expenses for salaried employees, you can claim the cost of meals and lodging (including showers). You’ll need to claim your employment expenses on the TL2: Claim for meals and lodging expenses form.

Note: Your employer will need to complete part 3 of the TL2 form.

Click here for more information on claiming your transport employment expenses.

Employed artist

If you earned employment income from an artistic activity, you can deduct expenses you paid if you did any of the following:

• composed a dramatic, musical, or literary work
• performed as an actor, dancer, singer, or musician in a dramatic or musical work
• performed in an artistic activity as a member of a professional artists' association that the Minister of Canadian Heritage has certified or
• created a painting, print, etching, drawing, sculpture, or similar work of art (reproduction of these is not considered an artistic activity)

These expenses can include any GST and provincial sales tax (PST) or HST that you paid. You might be able to claim a rebate on the GST/HST you paid.

The amount you can claim is the lesser of:

• the expenses you actually paid in the year and
• the lesser of:
  • $1,000 and
  • 20% of your employment income from artistic activities

minus the following amounts you deducted from your income from an artistic activity:

• musical instrument expenses
• interest for your motor vehicle and
• capital cost allowance for your motor vehicle

If you have expenses that you can’t claim this year because of the limit, you can deduct them from artistic income you earn in a future year. Also, you can deduct amounts you carried forward from previous years from your artistic income earned in 2023, as long as the total expenses are within the above limits for the year.

Employed musician

If you’re an employed musician, your employer might require you to provide your own musical instrument. If this is the case, you can deduct the expenses you paid related to the musical instrument.

Although you can’t deduct the actual cost of your musical instrument, the amounts you can deduct for your musical instrument are:

• maintenance costs
• rental fees
• insurance costs and
• capital cost allowance (if you own the instrument)

If you use your musical instrument for your employment and other purposes, you’ll need to divide the total instrument expenses based on the different uses. Click here for more information on calculating your musical instrument expenses.

You might be able to deduct the cost of eligible tools you bought during the year to earn employment income as a tradesperson (hairdresser, plumber, apprentice mechanic, etc.). These expenses can include any GST and provincial sales tax (PST) or HST that you paid. You might be able to claim a rebate on the GST/HST you paid.

An eligible tool is a tool (including associated equipment such as a toolbox) that:

• you bought to use for your job as a tradesperson and was not used previously
• your employer certified that it was necessary as a condition of and for use in your job as a tradesperson and
• is not an electronic communication device (like a cell phone) or electronic data processing equipment (unless the device or equipment can be used only for the purpose of measuring, locating, or calculating)

For 2023 and upcoming years, the maximum employment deduction for tradespeople’s tools has increased from $500 to $1,000.

As a result, eligible tool costs under the apprentice mechanics’ tools deduction would be ones that has a larger number or greater amount than:

• the combined amount of the increased deduction for tradespeople’s tool expenses ($1,000) and the Canada employment amount ($1,368 in 2023)

• 5% of the taxpayer’s income earned as an apprentice mechanic:

  plus the amount you received in 2023 under the Apprenticeship Incentive Grant and the Apprenticeship Completion Grant programs.

  minus the amount of any Apprenticeship Incentive Grant and Apprenticeship Completion Grant overpayments that you had to repay in 2023.

Note: If you’re an employed apprentice mechanic, refer to CRA’s Employment Expenses’ guide for information on deducting the cost of eligible tools. If you’re an apprentice mechanic in Québec, refer to Revenu Québec’s guide, Employment Expenses and check out this link.

If you work in forestry operations, you can deduct expenses you paid for buying and using a power saw (including a chain saw or tree trimmer) if you meet all of the following conditions:

• You use a power saw to earn your employment income
• You paid for the power saw under your contract of employment and your employer did not (and will not be) reimbursing you

You can deduct the cost of a power saw in the year you buy it, but you’ll need to subtract from the purchase price, the value of any trade-in or the amount you received from the sale of any power saw during the year.

You can also claim the cost of motor vehicle expenses provided these are not for travel from your home to the place you report for work on a regular basis. Refer to the I used my vehicle to earn employment income section below for more information.

You can deduct the expenses you paid related to the motor vehicle you used to earn employment income, provided these aren’t costs paid for regular travel between home and work.

If you’re a salaried employee or one that earns commission income, you can claim vehicle expenses as long as you meet all of these conditions:

1. You’re normally required to work away from your employer's place of business or in different places.
2. Under your contract of employment, you had to pay your own motor vehicle expenses.
3. You aren’t considered to have paid your own motor vehicle expenses if your employer reimburses you or you refuse a reimbursement or reasonable allowance from your employer.
4. You didn’t receive a non-taxable allowance for motor vehicle expenses such as per-kilometre rate.
5. You have a copy of form T2200, which has been completed and signed by your employer.

These expenses can include any GST and provincial sales tax (PST) or HST that you paid. You might be able to claim a rebate on the GST/HST you paid.

If you use your personal car for employment and personal use, you can only deduct the portion of expenses that are related to earning employment income. Expenses that can be deducted include:

• fuel (such as gasoline, propane, and oil)
• maintenance and repairs
• insurance
• licence and registration fees
• capital cost allowance (CCA)
• interest you paid on a loan used to buy the motor vehicle
• eligible leasing costs

Rebates, reimbursement, or an allowance - If you received a reimbursement, rebate, or an allowance for any of your vehicle expenses that weren’t included in your employment income, you’ll need to report those amounts on the T777 page. Don’t include any amounts that were repayments related to leasing costs. Certain leasing costs can be deducted from your income using this chart. However, if you have repayments that are owed to you, you won’t be able to use this chart to calculate the leasing costs; instead you’ll need to contact the CRA.

Calculating the interest on your vehicle loan - You can deduct interest you paid on money you borrowed to buy a motor vehicle or passenger vehicle you use to earn employment income.

If you use a passenger vehicle to earn employment income, there is a limit on the amount of interest you can deduct. It is the lower of the following:

• Total interest paid in the year
• $10* multiplied by the number of days for which interest was paid

*Use $8.33 for passenger vehicles purchased between December 31, 1996, and January 1, 2001. In all other cases, use $10.

Note: Be sure to keep a record for each vehicle you used. The record should include the kilometres you drove to earn employment income and total kilometres, dates traveled, destination, and purpose. Additionally, keep a record of the odometer reading at the beginning and end of the year.

Generally, you can’t deduct the entire cost of a property (such as vehicle or a musical instrument) you used to earn income. However, you can claim a percentage of the property’s cost known as depreciation or capital cost allowance (CCA).

You can claim CCA on your vehicle or musical instrument if you’re:

• An employee earning commission income and you meet all of the employment conditions
• A salaried employee and you meet all the conditions provided here
• An employed musician and you had to provide the musical instrument as a condition of your employment

The amount of CCA you can claim for your depreciable property depends on the class that property belongs to and its CCA rate. Refer to the CRA website to find out which class your vehicle or musical instrument belongs to.

Keep in mind, you don’t have to claim the maximum amount of CCA in any given year. You can claim any amount you want, from zero up to the maximum allowed for the year.

Important: If you sell your vehicle during the year, depending on the class, you might not be able to claim CCA on it.

Follow these steps in H&R Block’s 2023 tax software:

1. On the left navigation menu, under the Credits & deductions tab, click Tax Topics.

2. Select the Employment expenses & other income checkbox.

   

3. At the bottom of the page, click Add selected topics to my return.

4. Under the EXPENSES heading of the Employment & self-employment page, select the checkbox labelled Statement of employment expenses then click Continue.
   
   
5. When you arrive at the Employment expenses page, enter your information into the tax software.