CRA Form T2200, officially titled the Declaration of Conditions of Employment, is a prescribed form under the Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.)) that Canadian employers must complete and sign to certify the conditions under which an employee works. The form is a prerequisite for employees who wish to claim employment expense deductions on their T1 General Income Tax and Benefit Return. Section 8(10) of the Income Tax Act explicitly states that an employee may not deduct amounts under section 8 unless a prescribed form signed by the employer certifying the conditions of employment has been filed with the employee’s return.

The T2200 covers a comprehensive range of employment conditions, including whether the employee was contractually required to pay their own expenses while performing duties, whether they were required to work away from the employer’s place of business or maintain a home office, whether they were required to travel or use their own motor vehicle for work, whether they received any reimbursement or allowance, and whether they earned commission income. Each affirmative response on the T2200 opens a corresponding category of deductible expenses under section 8 of the Income Tax Act.

The employer does not file the T2200 directly with the Canada Revenue Agency. Instead, the completed and signed form is provided to the employee, who retains it with their tax records. CRA may request to see the form during a review or audit of the employee’s return. The employer must keep a copy of the T2200 with their payroll records. If an employer issues an incorrect T2200, both the employer and the employee may face reassessment. CRA has published detailed guidance for employers in Guide T4044, Employment Expenses, which explains how to complete each section of the form and what constitutes a legitimate condition of employment.

An employer must complete Form T2200 for any employee whose contract of employment requires them to incur expenses that are not fully reimbursed by the employer. The most common situations requiring a T2200 include employees who are required to travel regularly as part of their duties and are not fully reimbursed for travel costs, employees who must use their own motor vehicle for work-related travel, employees who are required to maintain a home office because it is either the place where they principally perform their duties or is used exclusively for employment purposes on a regular basis for meeting clients, and commission-based sales employees who are required to pay their own selling expenses.

The T2200 is also necessary for employees who are required to pay for their own supplies consumed in performing their duties, who must pay for an assistant or substitute, or who must rent office space away from the employer’s premises. In all cases, the requirement to pay expenses must be a genuine condition of the employment contract, not merely a voluntary choice by the employee. CRA scrutinizes T2200 claims carefully, and both the employer and employee must be able to demonstrate that the conditions stated on the form accurately reflect the actual terms of employment.

Employers should prepare and provide the T2200 before the employee’s tax filing deadline. If an employee leaves the company during the year, the employer should still provide a T2200 for the period of employment. The form covers the full calendar year or the portion of the year during which the conditions of employment were in effect. Since the introduction of Form T2200S for simplified home office claims, employers should determine which form is appropriate based on the scope of expenses the employee intends to claim.

A properly completed Form T2200 must contain accurate identification of both the employee and the employer. The employee section requires the full legal name, Social Insurance Number (SIN), and job title. The employer section requires the registered legal name, CRA business number, and complete business address. All information must match the records maintained by CRA and correspond to the T4 slip issued to the employee.

The conditions of employment section is the core of the T2200 and requires the employer to answer a series of yes-or-no questions about the employee’s working conditions. Each question corresponds to a specific deduction provision under section 8 of the Income Tax Act. The employer must indicate whether the employee was required to pay their own expenses (s. 8(1)(f) or (h)), work away from the employer’s premises, pay for supplies, rent office space or maintain a home office, and travel regularly for work. If the employee received any reimbursement or allowance, the employer must disclose the amount, as reimbursed expenses cannot be deducted.

The motor vehicle section requires the employer to confirm that the employee was required to use their own vehicle for work, state the approximate percentage of work use, and disclose any vehicle allowance paid. The home office section requires confirmation that the employee was required to maintain a home office and the percentage of duties performed from home. The employer must also indicate whether the employee earned commission income, as commission employees have broader deduction rights under ITA s. 8(1)(f). The form concludes with the employer’s certification, which must be signed by an authorized representative of the employer and dated. The certification constitutes a legal declaration that the conditions stated are accurate and that the employee was genuinely required to incur the expenses described.