Can I deduct my home office if I also work somewhere else?

Yes, but the test is stricter. If the home space is your principal place of business, you can claim it. If you have another place of business as well, the home space qualifies only when it is used exclusively to earn your business income and used on a regular and continuous basis to meet clients, customers, or patients there. Meeting only by phone or email does not satisfy the meeting test.

What if my home office expenses are more than my business income?

You can only deduct home office expenses up to the point where your business income reaches zero. They cannot create or increase a business loss. The part you cannot use this year is not lost: it carries forward and can be deducted in a future year, subject to the same limit against that year's income.

Is my home office deductible when self-employed?

Working from home comes with a real deduction

If you run your business from home, a share of what you already pay to keep that home running can reduce your business income. It is one of the most common deductions for the self-employed, and one of the most commonly gotten wrong. The rule that governs it is clear once you see it, so here is exactly when a home office qualifies and how the deduction is calculated.

The two conditions, and only one has to be met

To the CRA and Revenu Québec, your home work space is deductible when it meets one of two tests:

It is your principal place of business; or
It is used exclusively to earn your business income AND you use it on a regular and continuous basis to meet clients, customers, or patients there.

The first test covers most sole proprietors who work mainly from home. The second is for people who also have another place of business: in that case the home space has to be a dedicated area used only for the business, and the client meetings have to be real and ongoing, not the occasional phone call. Meet either condition and you can claim.

What you can actually claim

The deduction is a reasonable share of your home costs, most often the area of the work space divided by the total area of your home. You apply that percentage to the running costs of the home: rent or the interest portion of your mortgage, electricity, heating, maintenance, home insurance, and property taxes. If a room is 10 percent of your home's area and used for the business, roughly 10 percent of those costs is deductible. The share has to be reasonable and supportable, so keep the bills that back it up.

The detail few people know: it cannot create a loss

Here is the part that trips people up. Home office expenses cannot be used to create or increase a business loss. You can bring your business income down to zero with them, but no further. That does not mean the extra is wasted. The portion you could not deduct this year carries forward and can be claimed in a future year, against that year's business income, under the same limit. So a slow year does not burn the deduction, it simply defers it.

What this means for you in 2026

If you work from home and meet one of the two conditions, this is money you are entitled to keep. The work is in getting the proportion right, claiming the correct costs, and tracking the carry-forward when a year runs tight. That is bookkeeping we do for you, so the deduction is claimed properly and defensibly, and you are not leaving a legitimate expense on the table.