CA COVID Home Office Deductions
If you set up a home office due to the COVID-19 pandemic, you may be able to recoup those expenses if you are lucky to live in the following seven states:
Alabama
Arkansas
California
Hawaii
Minnesota
New York
Pennsylvania
When states issued stay-at-home mandates last year, most of the country was working in a fully-functioning office one day then setting up laptop computers on their kitchen table the next. For those who lacked a home office, carving out a workspace in your home or apartment required purchasing at minimum, a desk, monitors and an office chair.
These states will allow individuals to write off expenses incurred in 2020 for setting up a home office due to the COVID-19 pandemic, only if they were not reimbursed by their employers. Each state has different criteria, and to be clear, will provide deductions for unreimbursed employee business expenses only.
In California, the Franchise Tax Board (FTB) allows you to itemize deductions like office furniture, but you may also be able to deduct a portion of your rent, mortgage interest and utility bills attributable to the newly-created office space. If you are not an independent contractor, you do not qualify, and are unable to take advantage of these deductions on your federal income taxes.
But if you reside in California or one of the other six states, you do not need to be an independent contractor to claim unreimbursed employee expenses as an itemized deduction on your state income tax returns.
Note, the deductions claimed on your return must exceed the standard deduction for that state. In California the standard deduction amount for single or separate taxpayers will increase from $4,536 to $4,601 for tax year 2020. For married filing/Registered Domestic Partner (RDP) jointly, qualifying widower, or head of household taxpayers, the standard deduction increases from $9,074 to $9,202 for tax year 2020.
Source: California Franchise Tax Board.
