You think it’s a valid employment expense. The government may disagree
Nearly every Canadian incurs costs at work. Even though you consider them employment expenses, there are specific circumstances that mean the government may not agree.
From parking to mileage to supplies, Canadians pay out expenses related to their job throughout the year. In some cases, the expenses are reimbursed by employers. But not everything may be covered, and issues often arise when Canadians mistakenly believe they can claim these costs on their tax returns.
While there is a line for other employment expenses on tax returns, you need to have the right supporting documentation to make a claim. First, your employment contract needs to include the expenses you are required to pay. This would list items like travel, meals, personal protective equipment or cell phone calls.
Only specific types of expenses may be claimed such as travel, business use of home and supplies. And these expenses will only be allowed if they are included in your employment contract. Your employer has to sign and complete a T2200 Form (Declaration of Conditions of Employment). Even if your employer signs a T2200 Form but the expenses are not part of your employment contract, you cannot submit a claim.
There are many rules around claiming employment expenses. If you are reporting mileage, you need a logbook for the year, detailing the kilometres you drove related to work. Based on your logbook, you will calculate the percentage of work versus personal kilometres driven. Then you can claim a portion of your gas, maintenance, insurance and registration as expenses. So if work kilometres represent 20 per cent of your total mileage, you can claim 20 per cent of related auto expenses.
The same type of calculation would also apply to your cell phone charges. You track the time used for personal use versus work to determine what percentage of the charges you can claim. If you only have one cell phone, the Canada Revenue Agency will assume there is some personal use, so you cannot claim 100 per cent of the charges. Supplies cannot be claimed unless they are used up directly in the course of your employment. This would include items such as stationery and bandages, but not uniforms or safety boots.
You will need to attach receipts to your T2200 Form if you submit a paper return. If you are filing electronically, make sure you keep your paperwork handy. Employment expenses are a commonly reviewed credit by the CRA, so you may be asked to provide proof after filing.
Unless your employment contract specifies costs you must pay and you have a corroborating T2200 form signed, there are really no work-related expenses you can claim. And unfortunately, that is true of most Canadians.