Starting in 2020 many more taxpayers have begun working from home. What effect, if any, does working remotely have on your tax return?
Can I deduct home office expenses?
Home office expenses are not deductible if you are classified as an employee and paid via a W-2 (Tax Cuts and Jobs Act). This deduction is currently scheduled to return in tax year 2026. An exception may apply if you are an Armed Forces reservist, Qualified performing artist, Fee-basis state or local government officials, or an Employee with impairment-related work expenses. If you fall under qualifying employees, see Form 2106 for more information.
If you are a Resident of a State which still allows unreimbursed employee expenses, you may still complete Form 2106 on the Federal return to carry this information to your State return.
If you are a self employed individual and use a home office as your primary place of business, you may deduct home office expenses directly on your Schedule C.
How do I file my State taxes?
If your resident State is the same State your employer’s office is located in, file your resident State return normally.
If your resident State is different than the State your employer’s office is located in, please check with your State department of revenue for the applicable tax laws in your State. Generally income is taxable to the State in which the services are performed, however tax laws will vary from State to State.