I believe working at home due to COVID19 doesn't allow you to use the home office deduction, correct? Yet, I heard NY State residences can, is this true? How do I file?

Forum|Forum|5 years ago
February 8, 2021
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Best answer by AmyC

Thank you Amy!

I was told to work from home by my employer due to COVID, our office is not conducive due to COVID guidelines and health regulations. Therefore, I've been working from home for the past year. I had to set up a home office specifically for this purpose and conduct all business from here. Would this count as a "home office" under "job-related expenses"?

Again, I stress that I am not self-employed but the employers highly suggest we do not come into the office since COVID. Adding extra expenses to my home, supplies and bills.

Thanks again for clarifying, I just want to make sure I am actually eligible and not going to be red flagged for an audit due to this!

While the federal does not allow the deduction, the state of NY does allow employee expenses. It sounds like you qualify! You were told to work from home, you win. Your employer may have used words like, stay home if possible. Any strong wording of preference, which was the case for so many. Claim those expenses!

Yes, you set up an office, you use it, you are entitled to claim it. Enjoy!

ReneeM7122

Level 9

It depends whether you itemize or take the standard deduction.

If you have employee expenses to deduct, you report them on Form 2106, Employee Business Expenses, which you attach to your Form 1040 (when you use TurboTax, we’ll fill in all the right forms for you). The deductible expenses from Form 2106 are entered on your Schedule A, Itemized Deductions.

If you do not itemize your deductions, you cannot deduct unreimbursed employee expenses. In addition, employee expenses are part of the miscellaneous deductions, and subject to a 2 percent floor. This means that only those amounts that are greater than 2 percent of your adjusted gross income can be deducted. For example, if your adjusted gross income is $100,000 and your total miscellaneous deductions are $4,500, you can deduct only $2,500 —2 percent of $100,000 is $2,000, and the amount over that is deductible.

Here's a TurboTax article with more information.

It used to be simpler. Unfortunately, for employees who now telework from home due to COVID, the Tax Cuts and Jobs Act eliminated deductible expenses tied to maintaining a home office )without the need to itemize). Independent contractors (non-employees) may take a home office deduction on Schedule C.

States follow federal guidelines, so what happens on your 1040 flows to your New York tax return. This includes credits and deductions.

ikariangurlAuthor

Level 2

Hi Renee,

Thank you so much for answering my question! Just to clarify: When I am in the "Job Expenses for W-2 Income" and the question comes up about "Home Office" am I entitled to fill out this section if I am working from home for the past year due to COVID-19? I do all my work-related business from home and in an area of my home that is only used for work. Would this count? I have taken on many expenses due to this, but I am unsure if I qualify to fill out the "Home Office" part since I am not self-employed. As you mentioned, if I do not fill this out then my state taxes (NY) will not allow me any credits or deductions.

Thank you for clarifying and for your help!

AmyC

Level 15

I think you should be able to claim the employee expenses for home office. Is it regular, exclusive, main place of business, yes to all. As for the office, is it for the employer's convenience? With Covid, maybe it is. They did not want you coming to work.

The state of NY does allow you to claim employee expenses under the old federal rules from 2017. Here is a link to NY website 2020 New York itemized deductions - Department of Taxation ... You can click on Employee Expenses and verify your different expenses with the law.

This gets filled out in the federal section to begin.

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AnnetteB6

Level 15

Ohio does not allow a deduction for unreimbursed employee business expenses. Therefore, there is not a deduction for claiming a home office as a W-2 employee if you are filing an Ohio tax return.

@Anna7271

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