topic I am a W2 employee who works from home in a different state from where my company is based. My employer wants to reimburse my home office expenses. Can he do that? in Deductions & credits

I am a W2 employee who works from home in a different state from where my company is based. My employer wants to reimburse my home office expenses. Can he do that?

adrianfrankfurte — Tue, 03 Sep 2019 16:58:49 GMT

He wants to reimburse me for the fact that I have a dedicated office at my house, pay for my own internet, computer, utilities, etc. He wants to wrap it into one lump sum reimbursement for this year. What should I know as far as the IRS is concerned?

Re: I am a W2 employee who works from home in a different state from where my company is based. My employer wants to reimburse my home office expenses. Can he do that?

rjs — Tue, 03 Sep 2019 17:46:05 GMT

Your employer can pay you any amount that he wants, for any reason. But what you should know is that the reimbursement for your home office expenses is additional taxable income, the same as if your employer gave you a bonus. It will be included in the gross wages on your W-2 and on your tax return. You cannot claim a tax deduction for your home office expenses. Under the new tax law, for 2018 through 2025 there is no deduction for employee business expenses of any kind.

Re: I am a W2 employee who works from home in a different state from where my company is based. My employer wants to reimburse my home office expenses. Can he do that?

adrianfrankfurte — Tue, 03 Sep 2019 18:29:31 GMT

Thank you.

Re: I am a W2 employee who works from home in a different state from where my company is based. My employer wants to reimburse my home office expenses. Can he do that?

adrianfrankfurte — Tue, 03 Sep 2019 18:47:02 GMT

One more question: when I relocated to my remote office, I drove the distance. Would that qualify as a tax free reimbursement? Since mileage is still reimbursable?

Re: I am a W2 employee who works from home in a different state from where my company is based. My employer wants to reimburse my home office expenses. Can he do that?

macuser_22 — Tue, 03 Sep 2019 19:19:57 GMT

@adrianfrankfurte wrote:

One more question: when I relocated to my remote office, I drove the distance. Would that qualify as a tax free reimbursement? Since mileage is still reimbursable?

There is none. As stated above - ALL employee expenses (and all miscellaneous deductions) have been eliminated for 2018-2025.

(Even when they were allowed they were itemized deductions AND first reduced by 2 of AGI so very few taxpayers would have enough miscellaneous deductions to overcome the 2% AGI hurdle and enough itemized deductions to get any benefit. And for 2018 the standard deduction is doubled so very few taxpayer can even itemize in 2018.)