An Employee Home Office Expense Deduction for the New Normal

Abstract

Congress has continually struggled with allowing employees a deduction for unreimbursed home office expenses. Perceptions about the legitimacy and necessity of such a deduction have resulted in what many may now view as arbitrary and inequitable tax policy. As millions of employees have been required to work from home during the pandemic, there has been a tangible shifting of office space costs from the employer to the employee. Although work life will certainly return to some form of new normal, it is important that Congress realign tax policy to recognize the increased burden being shifted from employers to employees as many employees continue to work from home. This could be done by allowing employees a limited above-the-line deduction for unreimbursed home office expenses.

Keywords: Home office deduction; home office expenses; pandemic; rent expense; office expense

JEL Classification: K00, K19, K34