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I'm trying to assess if I can claim on the work space in the home when I'm not getting income from my company.

There's a line that makes it seem like I cannot, though I might be reading it wrong.

The amount you can deduct for work-space-in-the-home expenses is limited to the amount of employment income remaining after all other employment expenses have been deducted. This means that you cannot use work space expenses to create or increase a loss from employment.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/commission-employees/work-space-home-expenses.html

My company is setup such that it operates from my home. I use a portion of the space as a home office to work from (software development).

The income to the company is very light right now as we're pre-launch and mostly pre-revenue (a few contract jobs). All the money we get from the company is returns of expenses now, we're not claiming or able to claim any income.

With that being the case, any home expenses seems like it would just increase the loss, which if I'm reading the above line correctly, we cannot do, as this is intended to be a claim on your losses against actual income.

Am I misunderstanding this or should I be looking at another route to dealing with using a home office for my company?

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Your reading of the line is correct. The two lines after the one you quote reinforce the statement.

However you can get round this very simply by having your business pay you a salary. The salary is an expense to the business, but it is income to you. And it is income to you that is the limit on how much you can deduct for the home office. Of course paying yourself a salary also creates more income for you which you have to pay tax on, but presumably you are receiving some income from the business to cover your living expenses. I'm not certain of the details, and I would consult a tax professional before doing this.

The issue by the way is that without a line like this, people can set up a 'business' which did virtually nothing. Then they could say they were using the office to 'run' that business and claim the tax deduction on it, despite the business generating virtually no income. Revenue Canada prevents this by having lines like this in the regulation.

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