Home office expense for W2 work

[Pebs]

I work from home 100% via W-2 work. Turbo tax has a question about employment expense for W-2 work, can I enter my home office expense on this part like rent for apartment and utilities?

[MindyB]

No, currently unreimbursed employee expenses aren't deductible for federal purposes.  These expense were considered unreimbursed employee expenses and have been suspended through 2025.  They currently are set to be reinstated in 2026.  

While home office expenses are not deductible for federal purposes for W-2 employees, it may be deductible for state purposes. You can check your state's instructions to see if they allow this, or enter the expenses and let TurboTax figure any deduction for you.

Here's some information you may find helpful: Are Unreimbursed Employee Expenses Deductible?

[xmasbaby0]

W-2 employees cannot deduct job-related expenses on a federal return.  Job-related expenses were eliminated as a federal deduction for W-2 employees by the tax laws that changed for 2018 and beyond.  Your state tax laws might be different in AL, AR, CA, HI, MN, NY or PA.

If you live in a state that lets you deduct job-related expenses, the information will flow from your federal return  to the state return, so enter it in Federal>Deductions and Credits>Employment Expenses>Job-Related Expenses

[Pebs]

Thank you for the response. I live in CA. I tried entering my W2 home office expense and noticed it changed my state refund, and the federal due amount remained the same. Does that sound about right? 

[xmasbaby0]

Yes that can be correct.   W-2 job-related expenses will have no effect on your federal refund or federal tax due, but they might affect your state result.

[CamJon]

I live in Idaho. We do not have any of the special circumstances. Why is turbo tax giving us a tax credit?

[DawnC]

TurboTax calculates the credit for use on your state return, but the credit is not entered on your federal or Idaho tax returns.    If you were to prepare a state return for California, the amount would be deductible on that return.     All of the state information is entered in the federal section, so the interview remains available in the federal return, but the credits that are generated are only deductible on state returns that allow the deduction.  

If you preview your Form 1040, you won't see that credit applied.   Preview Form 1040 in TurboTax Online.

Use Forms Mode if you are using the desktop software.   You will see Form 2106 in your return, but it will be marked as For State Only.  And no amounts from that form get transferred to your federal return.    @CamJon