Yes, your corporation can claim home office expenses on its tax return, but only the portion of your home used exclusively and directly for business purposes qualifies. The CRA allows two methods to calculate this deduction: the simplified method (fixed rate per square foot) or the detailed method (tracking actual expenses). Your corporation must have a dedicated workspace, not just a corner of your kitchen table, and you'll need to maintain clear records of all expenses claimed. When you operate your business from home as a corporation, the calculation differs slightly from sole proprietors. Your corporation is a separate legal entity, so it must reimburse you for the home office space you're providing to it. This reimbursement is an expense for the corporation and income for you personally, but it helps document the legitimate business use. The expenses your corporation can claim include: Rent or mortgage interest (proportional to office space only) Property taxes (allocated to home office percentage) Utilities (electricity, heating, water, internet) Home insurance (business portion) Maintenance and repairs (office area only) Office equipment and furniture depreciation Cleaning and maintenance supplies Property maintenance (yard work, snow removal allocable to office entry) Simplified Method This is the easiest approach.
Yes, but only if you have a dedicated workspace used exclusively for business. The deduction is calculated based on the percentage of your home used for business, so part-time work doesn't prevent the claim. However, the space must still meet CRA's exclusive use test.
No, the simplified method doesn't require receipts. You just need to calculate and document the square footage of your workspace and apply the fixed rate. Keep your measurement records in case of an audit.
No, only your corporation claims the deduction on its tax return. If the corporation reimburses you, that reimbursement is income to you personally, offsetting the deduction claimed by the corporation. This avoids double-dipping.
No, only mortgage interest and property tax are deductible, not the principal portion. If you're unsure what portion of your payment is interest, contact your lender or refer to your mortgage statement breakdown.
The space must be used exclusively for business to qualify. If you watch TV or socialize in the office regularly, the CRA may deny the deduction entirely. A dedicated room or partitioned area that's used only for work is ideal.