CRA: Employers can now reimburse home office furniture tax-free

Over the past 6 months we’ve had a few clients ask about supplying employees with equipment to set up home offices. Many went ahead and reimbursed staff for desks and/or chairs now that they are working from home.

I know this is not our field, but when I saw the article I thought I’d pass it along as it seems to give a bit more clarity to what can be done tax-free

The Canada Revenue Agency (CRA) has added home office furniture to the list of expenses that employers are allowed to reimburse tax-free — as long as the expenses were related to the Covid-19 pandemic, a CRA official said at the national conference of the Canadian Tax Foundation on Tuesday.

The agency allows employers to reimburse employees up to $500 in allowable expenses without taxing that amount.

Previously, the CRA had indicated that only employer reimbursements of personal computer equipment expenses would be eligible for tax-free treatment under the $500 threshold. Reimbursed amounts above the threshold would be treated as as a taxable benefit for the employee.