In a notice on its website, the ATO said it will apply the WFH shortcut method until 30 June 2021.
The method initially applied from 1 March to 30 June 2020, and was already extended up until the end of December 2020 before the ATO’s notice.
As a result of the extension, small businesses can use the shortcut method to calculate their working at home expenses for the periods:
- 1 March to 30 June 2020 in 2019–20 tax return
- 1 July to 30 June 2021 in 2020–21 tax return
The ATO said it may extend this period, depending on when work patterns return to normal.
In most cases, if someone is working from home as an employee, the ATO said there will be no capital gains tax (CGT) implications for their home.
Individuals can claim a deduction of 80 cents for each hour worked from home if they were working from home to fulfil their employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls, or incurred additional running expenses as a result of working from home.
According to the ATO, the shortcut method covers all additional deductible running expenses, including:
- electricity for lighting, cooling or heating and running electronic items used for work (for example, your computer) and gas heating expenses
- the decline in value and repair of capital items, such as home office furniture and furnishings including capital items that cost less than $300
- cleaning expenses
- your phone costs, including the decline in value of the handset
- your internet costs
- computer consumables, such as printer ink and stationery
- the decline in value of a computer, laptop or similar device
“You don’t have to incur all these expenses to use the shortcut method, but you must have incurred additional running expenses in some of these categories when working from home,” the ATO said.
“If you use this method, you can’t claim any other expenses for working from home for that period.
“When you are calculating the number of hours you worked from home, you need to exclude any time you took a break from working.”