Employees absorb most home workspace costs

 Facilities managers at many large corporations foresee they’ll be accommodating the needs of a smaller on-site workforce during the next eight to nine months. The majority of corporate real estate professionals responding to a recent CoreNet Global survey expect their companies’ formal office space will remain more than half empty until at least June 2021.

It’s also expected that employees will most often return when they need to work collaboratively with colleagues and then retreat to home offices or decentralized co-working spaces for individual tasks. Although companies may realize operational savings as their office footprint shrinks — 86 per cent of survey respondents predict that outcome over the next two years — expenditures to help staff outfit productive home offices remain fairly modest.

Thus far, more than one-third of survey respondents report no per-employee allocation has been established for furnishings or technological support in the home workspaces where it’s projected staff will spend at least 42 per cent of their formal work hours. Another seven per cent of represented companies have offered less than USD $100, while only 22 per cent have provided more than USD $250.

The Canada Revenue Agency (CRA) is now working through the details of how employees can claim tax credits for home workspace costs on their 2020 income tax returns. As revealed during a public consultation last month, the tax credit will be available to claimants who fulfilled at least 50 per cent of their employment hours in their homes for continuous periods of at least four weeks due to COVID-19-related circumstances.

As part of the consultation, CRA revealed a proposed abbreviated version of the T2200 form, which employers must complete to enable workers to claim the credit. This would affirm that the employee was required to work from home and report the amount of reimbursement if any, the employer-provided for home workspace costs. However, tax law specialists with Borden Ladner Gervais LLP maintain CRA could collect the same information via two added boxes on the standard T4 form.

“While this revised form may help reduce administrative work slightly, those providing input during the consultation emphasized that it is still a burdensome requirement that will result in significant costs for large employers,” they observe in a recent newsletter. “In addition, we expect to see further guidance and examples on the requirements that must be met and the expense claims that can be made by employees for work-space-in-the-home expenses incurred during COVID-19.”

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