The home-office deduction can only be taken
by businesses or the self-employed. The tax law
enacted in late 2017 did away with the ability of
employees to claim any unreimbursed employee
expenses, at least until 2025. Some states may
allow people to deduct unreimbursed employee
expenses though.
For those who might be able to claim this
expense, Greene-Lewis reminds people that
the home office must be used “exclusively and
regularly as your principal place of business.”
That means the table where your kids do
homework or family eats dinner does not count.
Another big issue is for those who relocated
or moved during the pandemic, which could
complicate where they need to report and pay
state taxes, Pyron said.
Workers may need to file taxes in multiple states.
The rules vary by state but it is critical that people
check the new state’s tax resources for more details,
said Jeremiah Barlow, the head of family wealth
services at Mercer Advisors. It’s likely that they will
have two part-year state returns to file, one for the
old state and one for the new, Barlow said.
If people are hoping to lower their tax burden by
claiming residence in the state with a lower tax
rate, he urges them to tread cautiously.