Some Ohioans working from home may get tax break from IRS

Some Ohioans working from home may get tax break from IRS
FILE - This Wednesday, Feb. 13, 2019 file photo shows part of a 1040 federal tax form printed from the Internal Revenue Service website, in Zelienople, Pa. Tax filing season will start a bit later and look a bit different this year. That’s because the pandemic that defined 2020 has seeped into tax time as well. If you worked from home, received a relief payment, took on some gig work or filed unemployment benefits _ or someone filed a fake claim in your name _ there are things you need to be aware of. Likewise if you normally receive certain tax credits. The IRS will begin accepting tax returns on Feb. 12, 2021. (AP Photo/Keith Srakocic, File) (Keith Srakocic)

If you worked from home during the pandemic last year you may be eligible to deduct certain expenses on your 2020 tax return, but there are exceptions to the tax break.

The IRS said the “home office deduction” is only available to qualifying self-employed taxpayers, independent contractors and those working in the gig economy.

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Those who receive a paycheck or W-2 exclusively from an employer are not eligible to claim the deduction, even if they are working from home for their job.

The Tax Cuts and Jobs Act of 2017 suspended the business use of home deduction from 2018 through 2025 for employees, the IRS said.

The IRS said there are two requirements for people to be able to claim the deduction:

  • The taxpayer needs to use a portion of the home exclusively for conducting business on a regular basis
  • The home must be the taxpayer’s principal place of business.

To claim the deduction, a taxpayer must use part of their home for one of the following:

• Exclusively and regularly as a principal place of business for a trade or business

• Exclusively and regularly as a place where patients, clients or customers are met in the normal course of a trade or business

• As a separate structure that’s not attached to a home that is used exclusively and regularly in connection with a trade or business

• On a regular basis for storage of inventory or product samples used in a trade or business of selling products at retail or wholesale

• For rental use

• As a daycare facility

The expenses that are able to be deducted for the business use of home include: the business portion of real estate taxes, mortgage interest, rent, casualty losses, utilities, insurance, depreciation, maintenance, and repairs.

If you have questions on whether you would qualify for the deduction, you can contact a tax professional for guidance.