Payroll Project

The speaker, Aman Mali, discusses the changes in the T2200 form for 2023. The form is important for employees to claim expenses incurred while working from home. The CRA can verify these expenses and may contact either the employee or employer. The form had two major changes: the removal of the flat rate method and work from home option, and the introduction of comprehensive documentation requirements. The CRA also introduced electronic submission of the form and stricter verification processes for employers. The changes aim to prevent abuse of tax credits and improve compliance. The speaker recommends visiting the NPI website for more information. Good day, class. First, I would like to introduce myself. My name is Aman Mali. I am in payroll industry now for more than five years and currently working as a payroll and benefit administrator with ICICI Bank Canada. Today, I would like to discuss my topic, changes in T2200 form for year 2023. T2200 form plays very important role for employee. Based on this information and this form, employee file for the expenses incurred by them while working from home. This is something provided by employer to employee in case CRA need to verify the expenses. CRA can contact either one employee or employer to confirm the expenses incurred during a calendar year. This is not need by employee while filing their taxes but employee request this form from employer. It is employer's duty to provide that form to them and if they were eligible for work from home expense on the basis of the agreement, they might be eligible for a refund. T2200 form had couple of changes. Firstly, CRA had stop flat rate method and work from home option because of COVID-19. This implies no shorter version of T2200 known as T2200S. Shorter version of the form had only three basic questions as did employee work from home due to COVID-19, did employer reimburse the employee for any home office expense and was that included in T4. Due to lack of information on form, many people have abused taxation credit via their taxation filing. Due to this abuse, CRA have made eligibility restrict for employment expense. CRA have introduced comprehensive documentation requirement for work from home expense like the tips for expense incurred for office supplies with date of purchase and description of the item, mileage logs which can cover travel expenses related to work only rather than the amount of declaration on return. Need to provide clear picture of what portion of home was used for work with utility, rent, insurance and property tax. All this and other expenses must be kept in written record with nature and purpose of the expense claim as part of compliance and tax audit. Secondly, in order to make the process streamlined and aligned with the compliance, CRA have introduced electronic submission of T2200 form. This tells organization to submit from electronically to CRA and Relief employee for sending out their supporting documentation online. CRA have also made verification process strict for employers while confirming the employee employment expenses with accuracy. In 2021, T2200 form had multiple expenses with limited exclusion for vehicle, supplies or on home office expense. CRA did not had list of eligible expense list for workers for home expense as it was drastic and immediate change in work style. It was difficult for both employee and employer to figure out expense to claim with CRA as CRA website was not updated with expense list and detailed calculation for expense, separating work expense from home expense. In mid of 2021 and 2022, CRA started awareness regarding work from home expense via their website, news and through nationalized agency like National Payroll and others. This campaign and scheme by government help a lot of individuals with their increased expense due to COVID-19. This help employer to in form of encourage employee to work from home option and reduction in employer cost in form of renting out workplace and utility. As CRA only kept detailed description matter for work from home expense, this has put a lot of work for employer in reference to payroll management. For example, if employee contract required them to do work from home, an employee need state that reason in the form as well to keep a clean record of expense incurred, paid and reported in T4. This increase in payroll cost for organization as they update payroll system to record employee expense on payroll and get the report back on correct T4 box for employee. Employer also need to state if any expense incurred by employee but did not get reimbursed from the company. As this form is subject to audit, CRMA request employer to verify employee expense and contract. This makes employer to keep the record as retention policy established and announced. While filing the form for employee, employer also need to track down any leave taken by employee from work with exact information before they make credit apply by employee on their return. All the above change increase payroll administration and cost to run it. This change in T2200 form also affects company's compliance and legislative structure. As employee due diligence need provide employee awareness on how to navigate the changes in the form to align with latest legislative change. Now employer will need to conduct more review on expense documentation and educate employer by providing training on updated rule and law. Failure to comply with legislation or compliance on the change in work from home expense can lead to fine and penalty to both employee if wrongly apply credit on their return or if employer is unable to verify the expense incurred by employee which are claimed and acknowledged. These changes also make employer to monitor and assess changes of employee as this may be positive or negative outcome for employee perspective. If negative, then business need change or update their strategy as per employee and employer benefit. To sum this up, the change in form T2200 by CRA definitely has some positive impacts according to me. As these changes completely stop abuse of credit on the taxes. I know this change made more work from employer as cost wise and administration related. This is somewhat I feel like was due in coming future. Better were implemented by CRA to avoid false claim from an employee. As these changes are new, it will take some time by payroll person and payroll system to be updated as it enhance the accurate record keeping and filing. To know more on these changes, I personally refer NPI website because that is very well summarized, simple and clear for good understanding. NPI new website cover both change for employee and employer. Lastly, it is important to capture feedback from both point view which is from employee as well as from an employer as per the strategy needed to be decide to tackle with this kind of outcome. I hope you like my audio presentation and please feel free to share your feedback regarding on the presentation or anything like that.