S. 18(12)(a)(ii) provides that no expenses related to a work space in the home can be deducted from income from a business unless the work space is used exclusively for the purpose of earning income from the business and used on a regular and continuous basis for meeting clients, customers or patients of the individual in respect of the business (unless, per s. 18(12)(a)(i), the home work space is the individual’s principal place of business). S. 8(13)(a)(ii) provides a parallel restriction regarding expenses related to a home work space which otherwise were deductible by an employee under s. 8(1)(f) or (i).
Regarding the impact of meeting clients in a home virtually, CRA confirmed its “long-standing position” that the term “meeting”, as used in both provisions “includes only face to face encounters” rather than virtual meetings. However, depending on the facts, the work space expenses might satisfy s. 8(13)(a)(ii) or 18(12)(a)(ii), regarding the work space being the principal place of business or of performance of the employment duties.