Self-Employed Deduction Carry Forward to W2

[Tmar45]

My grandson was self-employed in 2022 and received a 1099-NEC for that year. He now has a dollar amount carry over deduction to 2023 from a home office. The issue is that he now is a W-2 employee this year. Will this home office deduction still carry over to 2023 if he does not receive any income as a self-employed person?

[AliciaP1]

Yes, and it will continue to carry forward until he does have self-employed income again.  It's a benefit that is only deductible in the future year he deducts actual home office expenses again.

Per the IRS:

If your business expenses related to the home are greater than the current year's limit, you can carry over the excess to the next year in which you use actual expenses. They are subject to the deduction limit for that year, whether or not you live in the same home during that year.