How do I claim the tools expense deduction for tradespeople?

by TurboTax•1• Updated 1 week ago

Prior to tax year 2023 the CRA allows tradespeople a maximum deduction of $500. After 2022 the maximum deduction is $1,000.

The deduction is for the remaining cost of tools and equipment purchased for work, after first reducing the expenses by an amount that is indexed annually. For 2023 the reduction amount is $1,368. So for example, $2,368 or more of eligible expenses in 2023 will result in the maximum deduction of $1,000. For prior years’ thresholds, see Indexation amounts. Your employer must certify (using form T2200) that the tools were required for you to do the work.

To claim this deduction in TurboTax, select your version of software and follow the steps provided:

TurboTax Online

Locate the find function (magnifying glass icon), and enter T2200 into the search bar.
Select T2200- Declarations of Conditions of Employment from the list of populated results, then select Go.
Answer Yes on the Employment Expenses page.
Select the option for I received a T2200, then select Continue.
Select the option for other employment expenses, then select Continue.
Scroll to section for Tradesperson's Tools Expense, enter your amount(s), then select Continue.

TurboTax Desktop

During the interview part of your return, answer Yes to the question: Do you have expenses related to your employment?
Select the Income and Expenses section from the sidebar.
Select the page for Employment Expenses.
Continue answering the questions in sequence to enter your amount(s).

Note: For those using Forms mode, you will be able to enter these amounts by locating the T2200 form.