Can I deduct electric bill related to working remotely due to covid for New York State Return during 2020?

[FoundlingsAreOurFuture]

Federal no longer takes most deductions due to tax law changes from 2018 to 2025 for employees. NY State still uses 2017 IRS rules, with respect to deducting work related expenses. If I were able to use the home office deduction, I'm sure I could deduct the electric bill. I don't see a way to tell TurboTax to decline home office deduction for federal but accept it for NY State, as TurboTax pulls Federal tax data into the State Return for calculations. The next best thing is listing electric costs under W2 work related expenses. The question is, if I don't take the home office deduction, would NY State still accept electric costs due to working from home due to covid as a work related deduction?


Remember, Federal doesn't accept most deductions anymore and working from home due to covid is not a valid excuse to click "Yes" on home office deduction. But 8 or 10 states will accept deductions including New York.

[DanielV01]

While New York does allow the Unreimbursed Employee Expenses no longer allowed on the Federal return, you would have to be able to prove the home office deduction for them to accept it, which for New York means that your employer would need to require you to have a home office, and not simply have you working from home.

[FoundlingsAreOurFuture]

Thank you so much for your help!

So what you're saying is, in theory, I could use the home office deduction for New York State but I'd need proof that my employer requires a home office? For covid era, my employer doesn't care whether I get my work done in a separate home office or on my kitchen table, just as long as I get it done. For my own sanity, I do have a home office where I work remotely. I'm a bit confused. Are you saying my employer would have to have in writing that I need a home office to do my job, as opposed to working from my couch or kitchen table, in order to take the home office deduction?

On the NY State Return, I don't see a form or a field that says something to the effect of "this is where you enter the home office deduction from your federal return." The only itemized form I found is IT-196 and there's no distinction between home office deduction versus W2 work-related expense deductions. How would the state know whether I have a home office deduction or I'm just entering W2 work related expenses? As you alluded, the "Unreimbursed Employee Expenses field on IT-196 is where I presume the home office deduction would be included, amongst other expenses.

At the moment, from what I see, TurboTax is calculating that my NY State standard deduction is higher, so I'm not sure what government and TurboTax worksheets are present when the NY State itemize deduction is higher. If it was higher, maybe that would answer my question there.

Edit: After reading through the IT-196 instructions, I see there are separate worksheets. But because my standard deduction is currently higher in my NY state tax return, TurboTax is not showing me the government or TurboTax worksheets and, therefore, I'm not sure what the itemized deduction value is and how much it differs from the standard deduction value. If I knew how much the itemized deduction value is, that would help a great deal. If the two values were far off, that would tell me don't waste time entering in more deductions knowing that it won't surpass the standard deduction. Unfortunately, TurboTax doesn't include these worksheets, at least in my case. 

[DanielV01]

Although the Federal return no longer has this deduction for employees, you would still enter the information on the Federal return side of the program.  Do the following:

1. Open your account
2. Enter 2106 in the Search Field (magnifying glass in the upper right corner)
3. Click Jump to 2106

This is where you enter the Unreimbursed Employee Expenses.  No deduction on the Federal return, but it will carry over to your New York return if you qualify for the deduction.

The information I provided earlier is what New York will look for if they question the deduction.  New York is known to be aggressive with tax law enforcement.

[FoundlingsAreOurFuture]

Again, thank you for your help and your time.

It's tricky but I may be able to claim home office deduction and/or unreimbursed employee expenses. In my case, I already had reached out to the employer and let them know it's an advantage to them if they reimburse me and, that way, they can deduct on their employer taxes but, basically, there's very limited employee reimbursement, and I'm reading everywhere that that's the best bet for W2 employees working from home due to covid. I have an actual office I use exclusively for work in the home. If I can itemize on the state return, it could be interesting. NY is following the 2017 IRS Tax law for employee expenses and, last I checked, telecommuting due to covid is not in the 2017 IRS Tax law but it is in the 2020 IRS Tax law. And we know that telecommuting due to covid is not a valid excuse on the federal level.

Going by all that logic, it stands to reason that I have some ground to declare I have a home office and unreimbursed employee expenses the state should be able to deduct, assuming itemize is greater than standard deduction. As long as I have proper explanations, paperwork, receipts. documentation, I don't see how it's invalid to declare it.

Going back to the electric bill, since that's considered a type of utility, I gather it'd be very unusual, if not a red flag, to declare it as an unreimbursed employee expense, as opposed to part of the home office deduction.

One final thing: As I said, I wanted to see the government and TurboTax worksheets for IT-196 (the itemize deduction form for New York State); however, with my current numbers, the NYS standard deduction is still higher than the itemized number. I might be able to see the worksheets with the CD/desktop computer version of the software. With regards to the web version, however, TurboTax won't include these forms in the return preview unless the deduction is itemized.

I didn't want to go through the trouble of manually calculating the numbers for IT-196 to check the difference between the itemized and standard deduction numbers. I figured out another way without having to do all those calculations: I purposely entered in very high numbers for the home office deduction such that my New York State number for how much I owe/how much my refund is changed. I previewed my tax returns, including all government and TurboTax worksheets and, sure enough, there was IT-196 with all the calculations filled in. I was able to walk backwards and figure out just how much I'd need over the 2% AGI for the system to use the itemize deduction over the standard deduction. Now I can undo the changes and re-evaluate if I have enough expenses/home office deductions. I'd have preferred TurboTax just allow me to see the worksheets without having to play with the numbers but this was helpful and I didn't have to manually calculate IT-196 which saved me a lot of time.