It is personal tax filing time again! At this time of year, many employees will ask their employer for a signed T2200. There is much confusion surrounding an employer’s obligation to complete this form.
A completed T2200 certifies that certain conditions of employment exist which require an employee to incur out-of-pocket expenses in the course of performing employment responsibilities.
The employer must indicate that the employee’s contract required him or her to pay his or her own expenses while carrying out the duties of employment.
One must then determine whether the employee would be eligible to claim employment expenses for income tax purposes. The Canada Revenue Agency has specific guidelines concerning the ability to claim employment expenses. As well, employer reimbursements will affect the claim for employment expenses.
Motor vehicle expenses and home office expenses are the most common employment expenses claimed.
Organizations should consider creating policies that detail whether an employee is eligible to receive a T2200. Clearly defining the conditions under which an employee may request these forms will help reduce any uncertainty.