Updated December 20, 2021

The pandemic caused by this coronavirus has tax implications for employers and employees. What are they?

Several questions have arisen since the beginning of this pandemic that prompted many companies to opt for telework:

  • What can employees deduct on their income tax return for their tax refund?
  • What about home office expenses for employees?
  • Will their internet subscription be deductible?
  • What expenses can employers reimburse?
  • What is included in the $500 non-taxable amount to reimburse telework expenses?
  • As an employer, what are my new compliance requirements?

Our experts stay abreast of the main changes and will follow developments in the measures concerning your 2020 and 2021 tax returns and taxes.

Here are the answers to the main questions about deductible expenses for employees and the treatment of reimbursements, allowances and other benefits that may be granted.

Telework equipment

Employer’s supplies refund

An employer may compensate employees for home office expenses incurred. Generally, reimbursing employees for supplies used in the course of their work, such as paper, ink or long-distance calls, does not trigger a taxable benefit for the employees. It is therefore preferable to reimburse such expenses, upon presentation of supporting evidence, rather than granting employees an allowance, which would be taxable.

Office and computer equipment expenses and $500 refund

However, if the reimbursed expenses include a personal component for the employee, a taxable benefit could be triggered. This is normally the case if the refund is for furniture or computer equipment since the employee can use them outside the duties of employment.

Expenses covered by the relief (maximum $500 per employee)

• Computer equipment (e.g. printer, monitor)
• Office equipment (e.g. chair, worktable)

However, in the exceptional context of COVID-19, the Canada Revenue Agency (CRA) and Revenu Québec both consider that repayment, on presentation of supporting documentation, of a maximum of $500 to offset the cost of purchasing personal computer and office equipment so employees can perform their work duties at home is not a taxable benefit for the employee.

Home office expenses not reimbursed by the employer

Employees can deduct an amount for home office expense and supplies used directly in performing their duties if their employment contract requires them to pay the expenses and if they are not reimbursed by their employer. These conditions must be certified in a declaration signed by your employer.

Eligible home office expenses employees can deduct include electricity, heating and maintenance but not property taxes, home insurance premiums and insurance.

Internet, cell phone and other expenses

The tax authorities have issued several guidelines governing the expenses that are deductible as home office expenses, including cell phone and Internet charges and GST-QST costs. For full details on the treatment of these expenses and to find out which deductions and expenses are eligible, consult our publication on taxes and telework during the COVID-19 era, which will be updated as government guidelines evolve.

Do not hesitate to contact our experts, who will be pleased to accompany you through this at times complex process.

The document below is updated over time according to the measures’ evolution. Download it to find out the details of these measures.

Tax planning guide - rcgt

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Katy Langlais
Manager | CRHA, MBA | Human resources consulting

Did you know that half of all entrepreneurs are currently experiencing psychological distress? And yet, few are talking about it.

The pandemic and its repercussions caught everyone off-guard last spring. To keep their businesses alive, entrepreneurs had to be highly resilient and find quick solutions. They had to roll up their sleeves and dive into the action, while also finding time to step back and look for creative solutions.

As the days and weeks went by, new habits emerged along with various positive changes. For many, this period of change was an opportunity to question antiquated beliefs about the business world, re-evaluate their business model, make improvements or finally invest in projects that had been relegated to the back-burner for too long.

However, months of upheaval have sapped our reserves and worn us down. Energy levels have taken a hit and stress is piling up. Yes, we may have allies within our businesses and networks to support us, but being an entrepreneur can often feel like a lonely endeavour.

Preventing long-term consequences

Short-term stress can be beneficial. It can drive motivation and spark innovation. But over the long term, it’s damaging and can make you feel like you’ve lost control. Stress is your body’s reaction to a real or perceived threat. It sends a signal that triggers a fight or flight response. When that signal persists over time, a sense of powerlessness over the situation sets in. It’s perfectly normal for your concerns to give rise to negative emotions.

When your workload increases and your feeling of control decreases, the risk of burnout, exhaustion and depression is much higher. Entrepreneurs are used to working long hours and going to great lengths to meet their business goals. But when the results aren’t proportional to the time and energy you’ve invested, it can be hard to keep up the pace. Once that happens, you need to ramp up efforts to recover your strength.

Your reactions—including fatigue, exhaustion and the need to talk about it—are perfectly normal. Bottling it all in instead of reaching out for help will have long-term consequences. In short, it’s bad for you and for your company.

Check your blind spot: your own wellbeing

As an entrepreneur, you’re used to inspiring others, finding solutions, developing ideas and transforming plans into projects. Your passion hasn’t died and these qualities are sure to help rebuild the post-COVID world. But first you’ve got to pay attention to the harmful effects of stress and schedule some self-care. Issues that aren’t addressed today can take root and negatively impact your physical or mental health down the road. Before you can find a solution, you have to admit there’s a problem. Talk about how you’re feeling and seek out support, like you would for any other aspect impacting your company.

Quebec’s top entrepreneurs all have one thing in common: they’ve dared to ask for help and make use of available resources to build their businesses and keep them afloat. So why not do the same for yourself?

Being humble shows that you’re a positive leader who’s self-aware and open-minded. You’re not a robot. Be transparent about your experiences, worries, doubts and range of emotions. A genuine approach inspires confidence.

Finding balance is the key

What’s the key to restoring your health? It starts with establishing your priorities and striking a balance between six important areas.

Personal life

Managing your priorities is largely based on finding balance in your personal life. You want work effort to be offset with rest. That means mentally checking out and taking time for yourself.

Some people will choose to increase their sports activities, while others prefer reading, meditating or walking through a forest. Or maybe you’d rather recharge by reconnecting with friends and family. Choose whatever works for you, and then add a healthy and balanced diet to go with it.

Family life

It’s important to plan quality family time, in which you’re fully present both physically and mentally. Turn off your cell phone and decide that you’re unavailable for anything outside your family bubble during these moments.

Social life

Keeping in touch with friends is also essential. Make a point of hanging out with your buddies and if you need a hand, be open about it. You should never be too proud to ask for help.

Spiritual life

Accept that you’re not perfect. Recognize your strengths and weaknesses. Identify and welcome your emotions and fears. You’re only human, after all. Take a minute each day to reflect on your achievements. Cultivate gratitude and go easy on yourself.

Professional life

Identify your business’ internal and external contributors, empower your team members and delegate. Cultivate positive business relationships, grow your network and create alliances.

Financial balance

Identify your weaknesses, assess your liquidity management and move forward with concrete action plans. If you need assistance, be sure to call on business groups or expert consultants. They may be able to offer some much-needed support and tips for balancing your personal and business finances.

Take the first step toward better overall health. These are challenging times. Don’t be afraid to admit it and ask for help when you need it.

You’ve always been able to bounce back, find solutions and leverage helpful resources for your business. Now it’s time to do the same for yourself.

Our multidisciplinary team works with organizations of all sizes and across all industries in Quebec. We’ve got your business and personal needs at heart. Ask about our approach to promoting health among entrepreneurs.

This article was written in collaboration with Marie-Ève Proulx, senior advisor.

15 Dec 2020  |  Written by :

Katy Langlais is a recruiting and human resources consulting at Raymond Chabot Grant Thornton.

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The growing popularity of digital platforms for short­term rental accommodations has prompted the Federal government to issue rules to govern these new business activities.

The recent Fall 2020 Economic Statement updates the application of GST/HST on short-term rental accommodation.

The Government is proposing to apply the GST/HST to all supplies short-term rental accommodation effective July 1, 2021. These supplies are short-term accommodation, that is, a rental of a residential complex, a residential unit, or part of a unit to a person for a period of less than one month where the price is more than $20 per day. The applicable tax rate would depend on the province where the short­term accommodation is situated.

Accordingly, the applicable GST rate will be 5% for short-term accommodation in situated in Quebec, Manitoba, British Columbia, Saskatchewan, Alberta, Yukon, the Northwest Territories or Nunavut. The applicable HST will be 13% for short-term accommodation situated in Ontario and 15% for short­term accommodation situated in Nova Scotia, New Brunswick, Prince Edward Island or Newfoundland and Labrador.

Download this document to find out more.

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Christian Filteau
Partner | M.Fisc. | Tax

The agri-food sector is expected to contribute significantly to Quebec’s economic recovery. Now is the time for farm businesses to innovate and invest.

The pandemic didn’t spare the agri-food sector. Producers, primary input suppliers and processing companies all faced their fair share of issues. There were foreign workers shortages, supply chains disruptions (restaurants, hotels, schools) and decreased exports—all of which led to crop losses, production surpluses, lost sales and ultimately, lower revenues. In short, farm profits took a hit.

But at the same time, the buy local movement has taken off, leading to initiatives like Panier Bleu and triggering changes in consumer habits. Agrotourism also increased in several regions of the province (e.g., microbreweries).

Just 33% of the food Quebecers eat is grown in the province

The current situation has created an opportunity for local agri-food businesses to increase their market share. Recognizing the pandemic-driven spike in interest for local products, the Quebec government has allocated $157 million to increase the province’s food self-sufficiency through a number of measures, including adopting new technologies, acquiring equipment, making agricultural investments and promoting buy local initiatives.

Agri-food businesses need to make investments—like implementing robotization or automation to make up for labour shortages—in order to future-proof their operations. But these investments are often very costly. High debt levels can increase business risk and generate stress, especially for farmers who may also be involved in a business transfer or succession. And given how demanding it is to manage technological changes, business owners may have less time to spend on financial management.

Smart investments to ensure good financial health

Protecting your business’ financial health involves taking stock of your current situation and assessing the impacts of any investment projects before moving forward. In other words, look before you leap. Here are the key factors to consider:

  • Purpose of the project
  • Anticipated return on investment
  • Priority level compared with other projects
  • Actual cost
  • Tax impacts on profitability and debt levels
  • The latest financial aid programs

The new market reality and government support programs have created the right conditions for many agri-food businesses to modernize. But investments should be made thoughtfully. You want to take advantage of tax incentives and optimize revenues, while also ensuring that any investments are appropriate for your organization’s needs, lifecycle stage, business model and vision.

In addition to government assistance programs, some businesses may be eligible for R&D credits when they purchase or make specialized machinery.

Contact our experts for more information and transform your investments into financial levers.

10 Dec 2020  |  Written by :

Christian Filteau is a partner at Raymond Chabot Grant Thornton. He is your expert in taxation for...

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