Form T2200: How to Save Big on Employment Expenses

If you’re a salaried employee who pays out-of-pocket for job-related expenses, Form T2200 may help you recover some of those costs and lower your tax bill. But understanding exactly what the T2200 is, who’s eligible, and how to claim those deductions properly can be confusing.

This guide will walk you through everything you need to know about Form T2200. Read on to learn how this tax slip works, what expenses you can claim and how to file it correctly.

What is Form T2200?

Let’s start with the basics. What is the T2200 form, and what does it do?

Form T2200, officially known as the Declaration of Conditions of Employment, is a document filled out and signed by an employer to certify that an employee was required to pay work-related expenses out of their own pocket. These may include costs related to vehicles, travel, home offices, supplies, and more.

This form is essential because it gives the Canada Revenue Agency (CRA) proof that the employee incurred these expenses for their job and that the employer did not reimburse them.

Without the T2200, salaried employees cannot claim employment expenses on their T1 personal tax return.

So, you can think of the T2200 as your employer’s seal of approval that you did have legitimate work-related costs and that they should be deductible on your taxes.

Here is a summary of key facts about Form T2200:

Who Needs Form T2200 from Their Employer?

This form applies to employees who were required to pay job-related expenses out of their own pocket that were not reimbursed by the employer.

Your employer must certify on the T2200 that you meet at least one of the following conditions:

• Your employment contract states that you must pay for expenses required to perform your job duties
• You incurred expenses during your employment that your employer did not reimburse

So you must have paid expenses related to your job, and your employer did not pay you back through an expense policy or reimbursement process.

Four examples of roles that commonly require a T2200 include:

• Employees who use their personal vehicle for work, such as sales representatives or field technicians
• Employees who travel frequently for work (flights, hotels, meals)
• Employees who work from home and pay home office expenses
• Employees who purchase supplies, tools, uniforms, or other items for their job

Simply having a long commute or occasionally working from your kitchen table does not qualify you for the T2200. The expenses claimed must be necessary for your role and mandated by your employer.

What Expenses Can You Claim with Form T2200?

Here are eight common job expenses you can deduct with a valid T2200 form:

On the other hand, these types of costs cannot be claimed even with a T2200:

• Regular commuting costs between work and home
• Expenses covered by an allowance or reimbursement
• Childcare expenses
• Wardrobe items not specific to the job
• Fines, penalties, or legal fees due to breaking the law
• Most professional development courses and fees
• Personal travel insurance coverage

The key is that the expense must be reasonable, necessary for your work, and mandated by your employer as a condition of your employment.

How to Claim T2200 Expenses on Your Personal Tax Return

Now that your employer has certified your eligible work-related costs on the T2200, follow these six key steps to claim them on your taxes:

1. Have the employer fill out and sign the T2200. Do not submit the T2200 with the return.
2. Keep T2200 and expense receipts/documentation for records.
3. On tax return, fill out T777 with amounts for each expense.
4. Complete any other forms like GST370 for rebates.
5. Transfer total expenses from T777 Line 229 onto Line 229 of the return.
6. Keep T2200 and receipts for 6 years in case of an audit.

That said, correctly filling out forms T777 and T2200 allows you to reduce your taxable income and get tax relief on legitimate work expenses your employer did not reimburse.

What is the Difference Between the T2200 and T777 Forms?

Many people get confused between the T2200 and T777 forms because they work together but serve different purposes. The table below summarizes the key differences between the T2200 and T777 forms:

In essence, the T2200 form establishes the employee’s eligibility to claim certain expenses, while the T777 form is used to calculate and claim those expenses on the employee’s tax return.

Who is Responsible for the T2200 Form?

The employer is responsible for properly completing and signing the T2200 form for each eligible employee.

As the employee, you are not required to fill out or submit the T2200 yourself. Your only obligation is to keep the form for records and provide it to CRA if requested for verification.

Part A of the 3-page T2200 is for employee information. Part B is the key “Employer Certification” section, which the employer must complete and sign.

Employers should ensure they understand when employees qualify for the T2200 so that it is issued accurately. This CRA page for employers helps explain proper procedures.

Strategies for New Employees

For new employees or those newly eligible for the T2200, there are four smart strategies to maximize benefits:

• Discuss with your employer: Make sure your employer understands you qualify for the T2200 based on your contract and required expenses. Provide them with details of expenses you wish to claim.
• Gather expenses: Compile expense totals from the prior year to claim on your next tax return.
• Track ongoing expenses: Going forward, diligently track car mileage, travel costs, supplies, etc., so you can accurately calculate deductions.
• Organize documentation: Keep detailed records like receipts to support your claims in case of an audit.

With good prep work, new T2200 filers can take advantage right away and build the habits for smooth, headache-free claims each year.

Common Mistakes to Avoid When Filling Out the T2200 Form

When using the T2200, it’s important to follow proper procedures to avoid triggering CRA scrutiny:

• Don’t claim expenses without a T2200: The form is required to justify that expenses were required for your job. Don’t attempt to claim deductions without it.
• Match T2200: Ensure the amounts you claim on the T777 match those your employer approved on the T2200.
• Retain receipts: Keep all receipts, mileage logs, etc. in case expenses need to be verified later on. Disorganized records can lead to denied claims.
• Use current version: Download the latest T2200 and T777 each year. Expired forms could lead to rejection during processing.

With attention to detail when completing the forms, employees can avoid problems and securely claim the employment expenses they are entitled to.

Tax time can be confusing with all the different slips you might get. To help you out, we’ve made a quick list of the most common ones. You can check them out below:

• T5 Slip
• T4A Slip
• T4E Slips
• T5013 Slip
• T5008 slip

The Bottom Line

The T2200 Declaration of Employment Conditions provides Canadian employees with an opportunity to reduce taxes by claiming eligible work expenses not covered by their employer.

With what you’ve learned here, you can confidently claim the tax deductions coming to you. Just talk to your employer, keep good records, and fill out the T2200 and T777 forms every year. By putting in a little effort now, you can get back thousands later on.

FAQs for Form T2200