Most Americans who have used their homes to work remotely in the past year won’t be eligible to claim a tax deduction for home-related work expenses – even if they haven’t stepped foot in an office since March.
Since the onset of the coronavirus pandemic in early 2020, many people who would otherwise have to report to work in person began working from home. And while it’s common for self-employed workers to claim deductions related to their home office workspaces, most American workers don’t actually qualify.
Indianapolis attorney Timothy Riffle explained this is because of a change included in the Tax Cuts and Jobs Act of 2017, which eliminated miscellaneous itemized deductions through 2025.
“So, even if you are an employee and you’ve been working from home since March, the expenses associated with a home office, for example, are categorically non-deductable," he said.
People who are self-employed or own their own businesses are excluded from this change – but the definition of what constitutes a home office in the eyes of the IRS is quite narrow.
“You really have to have a dedicated room that is used only for that purpose, and you don’t share it with your kids while they’re doing homework from home," Riffle said.
But if you’ve spent a good amount of money upgrading your home office and you’re not eligible for the deduction, Riffle suggests reaching out to your company to see if it will reimburse you for those costs.
Riffle is a partner at Barnes & Thornberg, LLP in Indianapolis and an adjunct instructor at Indiana University’s Maurer School of Law.