Business Expenses

[Mike06]

A W-2 employee cannot deduct Home Office expenses, but can that employee deduct the cost of computer equipment and supplies for 2020 because of COVID-19?

[MaryK4]

No, on the federal tax return, you cannot deduct expenses incurred (including the purchase of equipment or supplies) if you are an employee, even if related to COVID-19.  Some states do allow the deduction for expenses.  

[Mike06]

Is California one of the states that allows the deduction for expenses?

Thanks!

[ToddL99 · Accepted solution]

Yes, CA allows its taxpayers to claim unreimbursed employee business expenses.

California did not comply with the new tax law so unreimbursed employee expense are still deductible on your state return. See Deductions on the CA Franchise Tax Board website.

California is one of the states that allows you to claim itemized deductions even if you take the standard deduction on the federal return. Therefore, you will should enter your federal Itemized Deductions even if you don't claim them on your federal return so that they will transfer over to the state return.