By SUSAN JONES
If you’re wondering if you should try to claim home office expenses on your taxes, the short answer is, it’s not worth it, according to Anthony Infanti, a professor in the School of Law who specializes in tax law.
The Tax Cuts and Jobs Act of 2017 made some changes to miscellaneous itemized deductions that would make most unreimbursed expenses incurred by employees ineligible to claim as deductions, he said.
Up until the mid-1970s, there was a fairly lax standard of what you could claim as a deduction from home office expenses. But in 1976, Congress approved Section 280A to the tax code, which required any home office expenses to fit stringent criteria to be allowed as a deduction. These include:
If you use your home as the principal place for any trade or business that you run, as long as there’s no other fixed location where a substantial amount of administrative or managerial work are done.
If you have patients, clients or customers coming to the home.
If you have a separate structure on your property where you conduct business.
The second two criteria are easily policed, since any comings or goings of clients or a separate structure can be observed. The “principal place of business” is a bit murkier.
“There's been fights over that over the years that have gone up to the Supreme Court about what does it mean for something to be the principal place of business for any trade or business the taxpayer has,” Infanti said. “But for employees, Congress has always had an additional hurdle. In addition to showing that you meet one of those three requirements, if you work for somebody else, you also have to show that your home office is for the convenience of your employer.”
Up until 2018, if you could meet these criteria, then you could claim unreimbursed business expenses as miscellaneous itemized deductions, but “only to the extent they exceeded 2 percent of your adjusted gross income,” he said.
Then the Tax Cuts and Jobs Act came along — the largest overhaul of the tax code in 30 years. It was signed by President Trump in December 2017. The act, which currently expires in 2026, fully disallows miscellaneous itemized deductions. The act did substantially raise the standard deduction for most taxpayers.
“That's what's going to kill it for most employees right now,” Infanti said. You can jump through every single hurdle to try to treat your home office as giving rise to deductions — including working at home for the convenience of your employer during COVID-19 — but the miscellaneous itemized deductions you would claim are currently not allowed.
Other working from home issues
What happens if you trip over the dog and hurt yourself when you get up from your home office desk to get something off the printer? And who pays for that printer and the ink?
With many Pitt employees now in their ninth month of working from home, it’s become pretty clear this isn’t just a temporary emergency. As Chancellor Patrick Gallagher has said before and reiterated at the Nov. 12 Senate Council meeting, “Our goal was to realize that we're going to be managing the very volatile and dynamic pandemic for the foreseeable future.”
What then are an employer’s responsibilities for employees who are working at home? These are issues that Jay Hornack, a private practice lawyer who also leads the Human Resources Law Online program for Pitt Law, has heard raised in class and among human resources professionals.
As regards work-related injuries, Hornack said, “Workers Compensation laws require insurance coverage for all employees. And if employees are working from home, and they are injured at home in the course of their employment, the employer is obligated to compensate them for any lost time from work plus medical expenses.”
He said the law about that is very clear in Pennsylvania but can vary from state to state. There are proof issues, he said, both for the employee to prove they were injured in the course of working and for the employer to disprove it.
“Without other employees around who could potentially be witnesses, workers comp claims can be more tricky these days,” Hornack said.
The issue of home office expenses — what is and what is not reimbursable — has been a popular topic lately on the Society for Human Resource Management website, Hornack said. Federal and state laws often already cover these issues, he said.
“As a general rule, if somebody switches from working at a particular job site in an office or some other work setting … to home, then any work-related equipment or improvements that are necessary in order for the employee to do their job satisfactorily are something that the employer has to pay for,” Hornack said.
That doesn’t mean an employer has to pay for a state-of-the-art desk to rest your laptop on, but it might include technology upgrades or items like high-quality headsets.
Any workplace safety issues generally fall under the federal Occupational Safety and Health Administration, but Hornack said, “OSHA has said that they are not going to be in the business of inspecting or making sure that people's home workplaces are up to certain standards.”
Some employers, such as Apple, review and approve employees’ home workplace areas to try to head off workers compensation claims, but Pitt has not done that. You can get tips on how to set up an ergonomically correct workstation from a series of videos from the Pitt Occupational Therapy Program
Susan Jones is editor of the University Times. Reach her at firstname.lastname@example.org or 724-244-4042.
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