ATLANTA — Working from home is the new normal for millions of Americans, many of whom adjusted to 2020 and the COVID-19 pandemic by swapping their cubicle for a work-from-home setup.
In some cases, the transition meant new expenses. Whether it's faster broadband for Zoom meetings, a higher electricity bill, or that new desk, can you deduct your home office expenses while working from home?
Financial expert Jini Thornton says, if you're an employee, the answer is unfortunately no.
"Unless you're self-employed, like a freelancer or a contractor," Thornton told 11Alive. "You may not deduct your home office expenses on your tax return."
It's a question the IRS continues to reiterate on its website, stating: "Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home."
A few years ago, the situation was different.
However, the Tax Cuts and Jobs Act suspended the business use of home deduction from 2018 through 2025 for employees.
Nevertheless, a chunk of the American workforce may still qualify for such tax breaks.
A recent study by Upwork showed 36 percent of Americans freelanced during the pandemic, but in order to qualify for the home office deduction, there are certain conditions.
According to the IRS, there are two basic requirements to qualify for the deduction. The taxpayer needs to use a portion of the home exclusively for conducting business on a regular basis and the home must be the taxpayer's principal place of business.
"If you use part of your residence regularly and exclusively," Thornton said. "Exclusively is what trips people up. It can't be a spare bedroom in your office, it has to be dedicated to your work."
Deductible expenses would include the "business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance, and repairs," the IRS said.
"I think a lot of people wouldn't have qualified anyway because you have to actually itemize," Thornton said, which is why she's encouraging employees to reach out to their company to find out whether other avenues of reimbursement are an option.
"I'm encouraging people to have a conversation with their employer just to see if they're potentially reimbursing for any of those expenses," Thornton said. "But again, until 2026, this deduction will not be coming back."