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How do I claim the tools expense deduction for tradespeople?

by TurboTax•53• Updated 4 days ago

Prior to tax year 2023 tradespeople could claim a maximum $500 deduction for tools. After tax year 2022 the maximum deduction is $1,000.

The claim is for the cost of tools and equipment purchased for work, after first reducing the cost by an amount that is indexed annually. For 2025the reduction amount is $1,433. So for example, $2,433 or more of eligible expenses in 2025will 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 using TurboTax, select your version of software and follow these steps:

  1. Answer the initial Personal info interview questions if you haven't already. This unlocks 2024 tax return.
  2. From 2024 tax return, under Add to your return, enter employment and select Employment Expenses.
  3. At Employment Expenses, select Yes. 
  4. At Employment Expenses Profile:
    • Select I received form T2200…, then continue.
    • Check the box for Other employment expenses, then continue.
  5. At Other Employment Expenses, scroll to section for Tradesperson's Tools Expense, enter your amount(s), then continue.
  1. Complete the Introduction/Profile steps of your return until the side menu appears.
  2. From the side menu select Income & Expenses > Employment Expenses.
  3. At the Employment Expense Profile screen, check the box for Tradesperson’s Tools Expenses and continue.
  4. At Tradesperson's Tool Expenses, enter your amounts for tools expense and income, then continue.
  5. Continue answering the questions. When you arrive at Employment Expenses Summary, you’ll see the amount of your claim. 

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