Work from home deduction in California

[MitchRapp]

Tax Year 2020 - I understand that COVID work from home expenses are not deductible on Federal Filing, however they are on the California return. How do I enter this in Turbo Tax when it does not walk me through it?

[ErnieS0]

Enter your job-related expenses in Deductions & Credits. Any applicable deductions will transfer to your state return.

1. In TurboTax, search for 2106 and then select the Jump to link in the search results.
2. At the Tell us about the occupation you have expenses for screen, enter your occupation, then select Continue.
   • If you land on the Job-Related Expenses Summary screen, you can select Add Another Occupation (to add another 2106), Edit (for an existing 2106), or Delete.
3. Follow the onscreen instructions to enter your employee expenses.

Unreimbursed employee expenses are no longer deductible for federal purposes, but are deductible on the California income tax return. The expenses must be larger than 2% of your federal adjusted gross income (AGI) to count towards your California deductions.

California allows taxpayers to deduct the larger of the state standard deduction or itemized deductions. TurboTax will give you the larger deduction so enter all your expenses in Deductions & Credits.

Related Resource:

Deductions

[MitchRapp]

Excellent. Thank you!

[hyacinthus]

Does this also apply to 2021 California tax return?

[Vanessa A]

Yes, California still recognized home office expenses and other job expenses as an itemized deduction for the amount that exceeds 2% of your AGI. 

[hyacinthus]

Thank you!

I'm having trouble doing the 2106 form. I searched under form for 2106 and then got to the "Employee Home Office Worksheet". On line 20 deductible mortgage interest, I wasn't able to type in any number. I did fill out the mortgage interest on federal return, but it didn't get transferred to this form. Can you please help? 

I called Turbotax but the tax expert was not familiar with the CA law and she also wasn't able to see my screen.

[ErnieS0]

You cannot enter an amount on line 20 of Employee Home Officer Worksheet. Enter your mortgage interest in the Interest and Taxes Smart Worksheet between lines 19 and 20 as an Indirect Expense.

If you entered Form 1098 elsewhere you can go to line B and double click to link copies of the Home Mortgage Interest Worksheet.

[hyacinthus]

Thanks for helping out, but on the Employee Home Office Worksheet, I'm not seeing a link to Interest and Taxes Smart Worksheet between lines 19 and 20. What I see:

- Line 19: casualty losses

- Line 20: deductible mortgage interest

The only form with a similar name is "Deductible home mortgage interest worksheet", which is filled out already. Yes I have form 1098 filled out.

[ErnieS0]

Correction: The amount of home mortgage interest on the California Employee Home Office Worksheet comes from the federal Employee Home Office Worksheet. Enter your home mortgage interest in the Interest and Taxes Smart Worksheet between lines 19 and 20 @hyacinthus

Edited 03/01/22 19:19 PST to correct data source

[hyacinthus]

@ErnieS0 to clarify, I don't have a federal Employee Home Office Worksheet because I worked for my employer from home for the entire year of 2021. My understanding is that I cannot deduct home office expenses on federal return but can do it for California return. The California Employee Home Office Worksheet does not take any numbers in line 20.

[GeorgeM777]

To follow-up on the comments from @ErnieS0, you can use the search bar (upper right side of your page) and enter "home office deduction."  That will take you to the page in the federal section of TurboTax where you can enter your home office expenses.

Because an employee's home office expenses are unreimbursed employee expenses, such expenses are no longer deductible on your federal return.  However, such expenses are deductible on your CA return, but in order that your home office expenses appear on your CA return, you first need to enter them in the federal section of TurboTax using the method described above.   

@hyacinthus

[hyacinthus]

Makes sense now. Thank you so much for your help!