Are You Eligible For The Home Office Tax Deduction? Probably Not

As we have entered into tax season, a big question that a lot of tax preparers are getting revolves about COVID-19 and working from home deductions. One deduction that has been around for some time, has been the home office tax deduction. If you spent the majority of 2020 working from home due to COVID-19, are you eligible for this tax deduction? Chances are you aren't. Here is what we know about it.

According to this article from realtor.com "The home office tax deduction can be claimed only by self-employed individuals—meaning freelancers, small-business owners, and anyone who works for themselves."

Even if you fall into this category, there are a bunch of requirements that have to be met to claim the deduction. One of the big ones, it that your home office must only be used as an office. So if you happen to use your office as a guest bedroom you don't qualify.

If you get a W-2, you are more than likely to not qualify if you worked from home in 2020 due to the pandemic, but there is a full-time remote employee exception for Minnesotans...according to the same Realtor.com article.

"W-2 workers living in these states (AL, AR, CA, HI, MN, NY, and PA) can deduct business expenses their employer didn’t reimburse them for. These can include a portion of your rent, mortgage interest, internet/utility bills, a new computer monitor, desk, or even an ergonomic office chair. Just be aware the deduction may not cover all of your 2020 work expenses 100%."

The rules on this deduction vary from state to state, and you SHOULD get the specifics on Minnesota from a licensed tax professional before you submit this deduction. Get more on this Federal deduction on the IRS website here.