Guidelines & Procedures

Use of Form T2200: Declaration of Conditions of Employment

Purpose

• To provide the administrative guidelines for use by Department Heads, Deans and Directors to determine when it is appropriate to certify the Canada Customs and Revenue Agency's ["CCRA"] Form T2200 - Declaration of Conditions of employment.
• Please note that this guideline likely has limited value for most University of Saskatchewan employees.
• For assistance in determining the applicability of this guideline please contact the Manager - Taxation at 966-2461 or via email at tracey.mchardy@usask.ca.

Canada Customs and Revenue Agency (CRA) Requirements

• Form T2200 must be completed for an employee to be able to deduct the following type of employment expenses:
  • Travel Expenses and Motor Vehicle Travel Expenses
  • Office Rent and Work space in the home expenses
  • Salary for substitute/assistant
  • Direct supplies
• A signed T2200 does not provide an employee with any assurance that expenses incurred are deductible. The eligibility to deduct employment expenses is a matter between the employee and CCRA. Employees wishing to deduct employment expenses are advised to review the CCRA's publications and / or seek advice from their personal tax consultant.

Guidelines

Approval and Signature

• The Form T2200 must be signed by a Department Head/Dean/Director.
• The Form T2200 can be signed only when the conditions for each type of expenditure, set out below, are met.
• Employees will provide a partially completed T2200 form to their Department Head/Dean/Director for approval, together with a listing of the expenditures that the employee wishes to claim.
• If the Department Head/Dean/Director is satisfied that all the conditions are met, the signed T2200 will be returned to the employee.  Otherwise, the T2200 Form will be returned to the employee with a memorandum outlining why the form was not approved.

Qualifying Expenditures

• Departmental budgets are made available to support most expenditures. However, it is recognized that there are circumstances where additional expenditures must be incurred by employees.

Travel Expenses and Motor Vehicle Expenses

All of the following conditions must be met for the employer to sign a T2200:

• The expenses claimed must directly relate to the duties of employment,
• The employee was required to pay for such expenditures*,
• The employee was required to carry on the duties of their employment away from the employee’s normal work location, and
• The employee did not receive a tax-free travel or motor vehicle allowance, as applicable.

An employee cannot deduct travel expenditures that relate to travel for which an employee has received a tax-free Vehicle and / or Expense (per diem) Allowance.

Office Rent and Work Space in the Home Expenses

All of the following conditions must be met for the employer to sign a T2200:

• The expenses claimed must directly relate to the duties of employment,
• The employee is required to pay for such expenditures*, and
• The employee is not entitled for reimbursement in respect of such expense [i.e., the expenditure is not eligible for reimbursement through a departmental, a research, an APEA or any other funds].

An employer cannot sign the T2200 if an employee has an office/workspace on campus.

Additional restrictions apply to the deductibility of home office expenses. CCRA permits the deduction of home office expenses against employment income only where the home workplace is:

• the principal place of employment, or
• used exclusively for the purpose of earning employment income and "on a regular and continuous basis" for meeting customers or other persons in the course of employment.

Employees are not entitled to deduct capital supplies, such as computers; bookcase; books; phone line; internet connection ...etc.

For further restrictions and details refer to the section on work-space-in-the-home expenses in chapter 3 of CCRA's T4044 - Employment Expenses guide, which can be found at the following web site: http://www.cra-arc.gc.ca/E/pub/tg/t4044/t4044-e.html#P282_19936

Salary for Substitute/Assistant

All of the following conditions must be met for the employer to sign a T2200:

• The expenses claimed must directly relate to the duties of employment,
• The employee is required to pay for such expenditures*, and
• The employee is not entitled for reimbursement in respect of such expense [i.e., the expenditure is not eligible for reimbursement through a departmental, a research, an APEA or any other funds].

Direct Supplies

All of the following conditions must be met for the employer to sign a T2200:

• The expenses claimed must directly relate to the duties of employment,
• The employee is required to pay for such expenditures*,
• The employee is not entitled for reimbursement in respect of such expense [i.e., the expenditure is not eligible for reimbursement through a departmental, a research, an APEA or any other funds], and
• The supplies must be consumed directly in the performance of the employment duties.

Employees are not entitled to deduct capital supplies, such as computers; bookcase; books; phone line; internet connection ...etc.

* This requirement may either be expressed in a written contract or tacitly implied [i.e., the failure to incur such expenditure couldlead to a poor performance evaluation or other disciplinary action on the part of the employer].

Other Employee Considerations

• A signed T2200 does not provide an employee with any assurance that expenses incurred are deductible. The eligibility to deduct employment expenses is a matter between the employee and CCRA.
• The Income Tax Act contains other criteria that must be satisfied by the employee, for example:
  • For meals to be deducted, the employee is required to away from Saskatoon for a period of 12 hours or more
  • The amount deductible for meal expenditures is restricted to 50% of the lower of:
    • The amount you actually paid; and
    • An amount that is reasonable in the circumstance.
  • Capital expenditures and related financing costs are not deductible against employment income other than a portion that relates to a personal vehicle, aircraft or musical instrument used for employment duties.
  • All expenditures must be reasonable in the circumstance.
  • Certain restrictions apply to the deductibility of home office expenditures, for further details refer to the section on work-space-in-the-home expenses in chapter 3 of CCRA's T4044 - Employment Expenses guide, which can be found at the following web site:http://www.cra-arc.gc.ca/E/pub/tg/t4044/t4044-e.html#P282_19936
  Employees are required to keep records, refer to chapter 1 and chapter 6 of CCRA's T4044 - Employment Expenses guide, which can be found at the following web site: http://www.cra-arc.gc.ca/E/pub/tg/t4044/t4044-e.html
• The above restrictions are not an exhaustive listing. Employees wishing to deduct employment expenses are advised to review the CCRA's publications and / or seek advice from their personal tax consultant.

Reference to Relevant CRA Publications

• T2200 Declaration of Conditions of Employment:
  • http://www.cra-arc.gc.ca/E/pbg/tf/t2200/README.html 
• T777 Statement of Employment Expenses:
  • http://www.cra-arc.gc.ca/E/pbg/tf/t777/README.html  
• T4044 - Employment Expenses guide:
  • http://www.cra-arc.gc.ca/E/pub/tg/t4044/README.html  
• Interpretation bulletin IT- 352R2 - Employee's Expenses, Including Work Space in Home Expenses:
  • http://www.cra-arc.gc.ca/E/pub/tp/it352r2/README.html 

Contacts

Where the Department Head/Dean/Director is uncertain if the T2200 form should be signed, the Manager - Taxation [966-2461] may be contacted for assistance.