Tax deductions for remote W2s

[Andreea12]

I work remotely, from home, as a W2 employee but I can't seem to get a tax break from a standard deduction in using my home office, equipment, etc.

Is there a tax break for this situation? If so, how do I navigate TT to receive that tax break? Thanks!

[DoninGA]

As a W-2 employee your employee business expenses are not deductible on a federal tax return due to the tax code changes in effect for tax years 2018 thru 2025, including expenses for a home office.

[Andreea12]

Thanks, are they deductible on a state tax return? If so, where can I find more information about that?

[MelanieC1]

Hi @Andreea12 

W2 employees can no longer claim unreimbursed employee expenses as miscellaneous itemized deductions.  The Tax Cut and Jobs Act (TCJA), enacted in 2018, eliminated unreimbursed employee expense deductions for all but a handful of qualified employees or an eligible educator.

The only qualified employees are:

• Armed Forces reservists
• Qualified performing artists
• Fee-basis state or local government officials
• Employees with impairment-related work expenses

While you can't claim these costs on your federal taxes, you might be able to on your state income tax returns if you live in Alabama, Arkansas, California, Hawaii, Minnesota, New York, or Pennsylvania.

Thank you!

[Cate9]

There are some states that allow home office deductions for employees. We just have to check to see if your state is one of them. 

[Opus 17]

---

@Andreea12 wrote:

Thanks, are they deductible on a state tax return? If so, where can I find more information about that?

---

You can list these expenses in Turbotax, the sections are still embedded in the program.  If you itemize on your state return and your state allows these deductions, the information will flow down to the state return even though it won't be used on the federal return.

If you want to know if your state allows the deduction (so you don't waste your time if it doesn't) we would need to know your state.

Also, even though you can't deduct work from home expenses, your employer is allowed to reimburse you tax-free for work-related expenses that you can substantiate with reliable proof.  (They are not required to reimburse you, but they can if they choose and the reimbursement is not part of your taxable income.)  If you have substantial WFH expenses, you may want to negotiate your salary and job conditions with your employer.

And lastly, if WFM is mandatory, and your expenses significantly cut into your net income, that might be an issue you can raise with your state labor board.  I know its not quite the same situation, but in my former state, the state labor board sued a pizza chain because the chain did not reimburse their drivers for mileage, resulting in some drivers making below minimum wage after taking car expenses into account.

[Andreea12]

It would be NM and AZ.

Please let me know: If you want to know if your state allows the deduction (so you don't waste your time if it doesn't) we would need to know your state.

[Andreea12]

Thanks, what is meant by an eligible educator?

[TeriH]

You're an eligible educator if you meet the following criteria: You work as a teacher, principal, counselor, instructor or aide. You've worked at least 900 hours during the school year. You teach at a public or private elementary or secondary school (K-12)

[MelanieC1]

You're an eligible educator if, for the tax year you're a kindergarten through grade 12 teacher, instructor, counselor, principal or aide for at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.

If you're an eligible educator, you can deduct up to $300 ($600 if married filing jointly and both spouses are eligible educators, but not more than $300 each) of unreimbursed trade or business expenses. Qualified expenses are amounts you paid for professional development courses, books, supplies, computer equipment  and supplementary materials that you use in the classroom. For courses in health or physical education, the expenses for supplies must be for athletic supplies. Qualified expenses also include the amounts for personal protective equipment, disinfectant, and other supplies used for the prevention of the spread of coronavirus. 

Thank you!