Can You Take a Tax Deduction for Your Home Office?

(KNSI) — Millions of Americans forced out of their offices by the COVID-19 pandemic set up make-shift ones in their homes in 2020, so many are asking if they can get a tax deduction for a home office.

Accountant Kathy Pickering says most of those forced to work at home can’t claim the home office deduction, even if an employer required them to work remotely due to the spread of the coronavirus.

“If you’re an employee of a company, you aren’t eligible to take the home office deduction or any of those unreimbursed business expenses.”

IRS spokesman Eric Smith says where it gets confusing is when you’re an employee working from home in a different state than where your employer’s office is located. He says each state has its own way of handling home office deductions.

Those who have questions about office deductions should check out IRS publication 587.

“The deduction is claimed on the form that you use to report your self-employment income, which is Schedule C. You can certainly find some information about that in the instructions to that form.”

A part of that form reads, “Generally, you cannot deduct items related to your home, such as mortgage interest, real estate taxes, utilities, maintenance, rent, depreciation, or property insurance, as business expenses. However, you may be able to deduct expenses related to the business use of part of your home if you meet specific requirements.”

Both federal and state income taxes are due May 17th. The IRS, U.S. Treasury Department, and Minnesota Department of Revenue moved the 2021 tax deadline because 2020 was so different from any other year; the extra month was tacked to the deadline to give taxpayers a chance to get everything straightened out.

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