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An Employee Home Office Expense Deduction for the New Normal

Posted on Apr. 5, 2021
[Editor's Note:

This article originally appeared in the April 5, 2021, issue of Tax Notes Federal.

]

Samuel D. Brunson is the Georgia Reithal Professor of Law at Loyola University Chicago School of Law. Christian A. Johnson is the Commonwealth Professor of Business Advising at Widener University Commonwealth Law School.

In this article, Brunson and Johnson argue for a limited above-the-line deduction to cover the costs of working from home and suggest that if Congress expands the deduction for unreimbursed home office expenses, it reconsider the requirements.

Copyright 2021 Samuel D. Brunson and Christian A. Johnson.
All rights reserved.

Congress has struggled with allowing employees a deduction for unreimbursed home office expenses for decades. 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.

I. Deducting Home Office Expenses

Until 1976 the tax treatment of home office expenses was the same as the tax treatment of any other business expense. As long as the costs of maintaining a home office were “ordinary and necessary” expenses, incurred while carrying on a trade or business, they qualified for the deduction.1 While the ordinary and necessary criterion did impose some limits on deductibility, those limits proved far less than imposing: Courts interpreted the ordinary and necessary requirement to mean that a business expense was “appropriate and helpful.” While the IRS pushed for a stricter standard than appropriate and helpful, courts disagreed. When taxpayers litigated the IRS’s rejection of their home office deductions, courts found that these expenses were deductible under the same loose standard that applied to any other business deduction.2

Like the IRS, Congress worried that the appropriate and helpful standard would allow taxpayers to transform personal living expenses into deductible business expenses. Congress noted as an example that under the less-strict standards, a university professor with a university office could “use a den or some other room in his residence for grading papers, preparing examinations or preparing classroom notes” and then deduct a portion of his living expenses. To prevent taxpayers from transforming ordinary living expenses into deductible business expenses, Congress broadly disallowed deductions for expenses associated with a taxpayer’s residence.3

A. A New Standard

However, Congress did not entirely disallow deductions for the business use of personal residences. It believed that some circumstances warranted a deduction for specific costs. As a result, it included exceptions to its blanket disallowance of residence-related deductions, including an exception for that portion of a taxpayer’s residence used both regularly and exclusively as the taxpayer’s principal place of business.4

The legislative history explains that when Congress said “exclusive” it meant exclusive; when a taxpayer used “a portion of a dwelling unit for both personal purposes and the carrying on of a trade or business,” the taxpayer did not meet the exclusive use test and could not take the home office deduction.5 The Tax Court adopted the legislative history’s absolutist view that to qualify for the deduction, a home office “must solely be used for business and not personal use.”6

On top of the exclusivity requirement, if a taxpayer wants to deduct home office expenses, the home office must be the taxpayer’s principal place of business. The Supreme Court explained that determining whether a home office is a principal place of business requires considering two criteria: the relative importance of activities performed at each work location and the time spent at each location. While these criteria do not create an objective bright-line rule, they ultimately determine whether the home office is the principal place of business.7 In applying this test, the IRS says it will first look to the relative importance of the work performed at home. Only if that does not provide a clear answer whether the home office is the principal place of business will the IRS look to the time test.8

For taxpayers who are employees, Congress imposed an additional limitation on deducting costs associated with residences: Not only does an employee have to use his home office regularly and exclusively for work purposes, but he must work from home for the convenience of his employer.9 While neither the code nor the regulations define this requirement, courts have explained that it “can’t just be a place in which the employee chooses to do some of his work.”10 Rather, working from home must be a “business necessity.”11

If a taxpayer qualifies for the home office expense deduction, he can deduct those expenses allocable to his home office. As with any deduction, the taxpayer must calculate, allocate, and substantiate his expenses. This calculation and recordkeeping can be burdensome, especially for small businesses and employees. To reduce the burden, the IRS has provided a safe harbor — rather than calculating deductible expenses, a taxpayer can instead deduct $5 per square foot of his home office for a space of up to 300 square feet.12

Even when an employee meets all the requirements for deducting home office expenses, she faces one additional impediment to her enjoyment of the deduction. Unlike self-employed individuals, who get an above-the-line deduction for their business expenses,13 employees get an above-the-line deduction for business expenses only when their employers reimburse them for those expenses.14 If an employer does not reimburse the employee, the IRC classifies the deduction as a miscellaneous itemized deduction.15 As a result, before 2018, employees who qualified to deduct home office expenses could only deduct those expenses to the extent they (combined with the taxpayer’s other miscellaneous itemized deductions) exceeded 2 percent of the taxpayer’s adjusted gross income.16 Effectively then, while employees could theoretically deduct expenses associated with a home office, the amount of deduction they were entitled to was often significantly lower than the expenses they incurred.

Then came the Tax Cuts and Jobs Act. Just in time for a pandemic that saw an explosion of at-home work, the TCJA eliminated all miscellaneous itemized deductions — including the deduction for home office expenses — for tax years through 2025.17 While the home office deduction remains available for self-employed taxpayers, by disallowing all miscellaneous itemized deductions, the TCJA took the deduction away from employees.18

B. A Proposal

Eliminating the home office deduction for employees creates real economic harm to those working from home — whether offices are closed because of the pandemic or because employers are moving to a new work-from-home model. The temporary elimination of the deduction for home office expenses was singularly ill-considered for this shift, perhaps in part because it was based not on policy but on Senate rules. As a result of both the lack of tax logic behind the change and the fact that Congress made the change temporary, there is no compelling reason to respect this disallowance as a critical part of the tax system. To remedy the dual problems stemming from the TCJA and the new patterns of pandemic-influenced working from home, we recommend that Congress provide an above-the-line deduction of $250 for home office expenses for those employees working from home two or more days a week.

Congress never explained why it suspended miscellaneous itemized deductions as part of the TCJA. The Joint Committee on Taxation merely noted that these deductions had been subject to a 2 percent floor and that the new law would temporarily eliminate them.19 The Congressional Research Service reported, however, that the elimination of miscellaneous itemized deductions was not premised on any substantive tax policy. Rather, the primary goal was to offset other revenue losses from the bill.20

Congress passed the TCJA along party lines by using a process called reconciliation, which allows some laws to avoid the filibuster and pass with a simple majority in the Senate.21 The reconciliation process cannot be used to pass bills that, among other things, violate budgetary revenue targets.22 To ensure that they could pass the TCJA with a simple majority, Senate Republicans needed to find places to increase revenue.

While the JCT did not break out its revenue estimate for eliminating miscellaneous itemized deductions, including the deduction for home office expenses, it did estimate the increased revenue from all the TCJA’s changes to itemized deductions at $1.27 trillion over 10 years.23 Eliminating miscellaneous itemized deductions provided significant leeway for Congress to cut taxes elsewhere and still pass the TCJA with a simple majority in the Senate. Because the elimination of the home office deduction is based solely on Senate procedural requirements, there is no reason to believe that Congress considered the home office deduction bad tax policy. As a result, there should be no problem reinstating a deduction in some form.

To take our proposed above-the-line deduction, a taxpayer would not need to meet the same exclusive use or convenience of the employer requirements as under current law. Instead, the taxpayer would have to demonstrate that he worked two or more days a week from his home office. Rather than requiring calculation, allocation, and substantiation, our proposed rule would assume that a taxpayer working from home incurs at least $250 of unreimbursed expenses associated with working from home for at least two days per week. This idea is similar in philosophy to the standard deduction, in which Congress has assumed that a taxpayer would have several itemized deductions, eliminating significant recordkeeping and fairness issues.

This would also allow taxpayers who do not have homes large enough to accommodate dedicated office space to enjoy the tax benefits for the costs of working from home. Under current law, a taxpayer who is unable to afford a larger home is penalized if she is unable to dedicate a large portion of her personal living space exclusively to a home office.

II. Tax Policy and Societal Change

The pandemic has transformed how employers and employees consider the physical workspace and where work can be done. Many employers no longer believe that an employee has to be at the office to be productive and effective. The IRC, however, has not kept pace with the economic consequences for employees regarding this new normal.

The recent shift for millions of employees from working at the office to working from home has been disruptive, expensive, and unprecedented. Employees have absorbed many of the ordinary and necessary costs of maintaining a physical office that have normally been borne by their employers. Effectively, a significant portion of an employer’s ordinary and necessary expenses has been shifted to the employee in the form of unreimbursed home office expenses.

This changing work environment should be considered in how we evaluate what costs and expenses should be deductible by employees as they carry out their employment responsibilities in their homes. Failure to recognize the effect of these societal changes on the fairness of the tax code can result in inequitable and arbitrary tax consequences, weakening the theoretical foundations of the IRC.

Congress has made changes to the code as work and employment conditions have changed, and has provided tax relief to employees by allowing deductions in specific circumstances. For example, Congress has provided an above-the-line deduction for educators for unreimbursed qualified expenses (explained later). Congress has also responded to taxpayers’ demands about the cost of child and dependent care.24 As employers have proven less generous in providing pension benefits, Congress has also liberalized and expanded the opportunities for employees to save for retirement through IRAs and 401(k) accounts.25

A. The Shifting Tax Burden

Employers are confronting a new reality with many employees working from home for probably the first time. Employers are discovering that many employees have retained their productivity at home and may not need to be in the office to the same extent as before. Although the experiment was launched unexpectedly and in an ad hoc fashion, employers are rethinking whether employees could be productive working from home as opposed to occupying expensive office space.26

Before the pandemic, only 7 percent of the 140 million civilian U.S. workers had the option to regularly work from home.27 In contrast, the Gallup Poll estimated that in September 2020, 33 percent of the population is always working remotely with 25 percent sometimes working remotely.28 It is estimated that even without pandemic conditions, 20 percent of the workforce could work from home three to five days per week just as productively.29 This changing pattern is extraordinary.

The potential cost savings from an employee working from home is substantial. Studies indicate that the annual cost to provide office space for employees can be in the thousands of dollars.30 Estimates place the per-person cost of an office beginning around $300 per month.31 Any reduction in the number of employees working at the employer’s office could result in significant office expense savings over time.

Employers have already begun to rethink the decisions they make about how much office space they need as they analyze who will be required to come back to the office and who will continue working from home.32 Possibilities such as office hoteling,33 desk booking, hot desking,34 or desk sharing35 are a frequent topic as employers consider whether or how employees would share space if they were to only physically be in the office part-time.

There is already evidence that employers are beginning to adjust their amount of office space. Although employees are not yet able to return to their offices en masse because of the pandemic, property management professionals and landlords are gearing up for a very different rental market.36 An estimated two-thirds or more of companies plan to downsize their office space.37 Landlords and tenants are already engaged in a painful process of renegotiating office space leases.38

Many of the physical costs of office space have been unilaterally thrust on employees by their employers during the pandemic.39 Employees are working from home typically without any reimbursement other than for computer equipment and similar expenses.40 There is little evidence of any effort to reimburse employees for the tangible and intangible costs of maintaining the physical cost of a home office.

The amount of office space required for employees to do their jobs can be significant. For example, a 2012 report suggests that the per person requirements vary from just 50 to 175 usable square feet to 245 to 525 usable square feet in the legal field.41 The actual calculations can be difficult to make and depend on a variety of tangible and intangible factors.42 Failure to provide the appropriate amount of space can take a toll on employees and the business. These estimates take into account the amount of space required to keep people comfortable and productive.43

Employers appear not to have taken those space requirements into account when shifting employees from an employer-controlled work environment to their homes. Many homes were not rented or purchased with the idea that a significant portion of the home would be dedicated to an office. Many homes have likely required the conversion of personal space into office space to enable an employee to do her job.

Does this shift to working from home actually shift costs to the employee? It is possible to claim that employees do not incur any additional costs by working from home because they already pay these costs as the personal costs of occupying their homes. This argument would be similar to why an employee should not be able to deduct the cost of lunch while at work, because the employee would be paying for lunch regardless. This argument, however, ignores tangible additional costs. By working from home, the employee is increasing her usage of electricity to power computers and other office equipment. There are also additional costs to heat or cool the home that would normally not be incurred when the employee is at the office. Also, occupying the home for an additional eight to 10 hours per day increases the wear and tear on the home just like wear and tear in an office.

The amount of office space required to work significantly reduces the amount of usable space for an employee’s personal life. Additional office equipment, desks, office chairs, file cabinets, books, etc., all significantly decrease the amount of personal living space available for an employee. Effectively, the employee ends up living in a much smaller personal space when working from home is imposed.

B. Reconciling Tax Policy

When Congress suspended miscellaneous itemized deductions to fund other tax cuts, it did not anticipate a global pandemic that would reconfigure how a significant portion of Americans work. In light of the changes created or accelerated by COVID-19, employees are bearing more costs for their work. Congress’s temporary elimination of miscellaneous itemized deductions forces employees to shoulder all these additional costs.

One way Congress could help employees would be to reinstate miscellaneous itemized deductions. This would represent a significant change, however, and in many cases would not provide any relief to employees working from home. Taxpayers only benefit from itemized deductions if the total of their itemized deductions exceeds the standard deduction.44 In 2021 the standard deduction for unmarried individuals is $12,550 and for married couples filing a joint return it’s $25,100.45 In 2019 an estimated 14 percent of taxpayers itemized. Moreover, those who itemized were disproportionately high-income taxpayers.46 Because an employee’s home office expenses are itemized deductions, restoring a miscellaneous itemized deduction for home office expenses will disproportionately benefit wealthy taxpayers.

Even if a taxpayer’s itemized deductions exceed the standard deduction, he faces an additional hurdle in deducting home office expenses. When miscellaneous deductions are allowed, a taxpayer could only deduct them if and to the extent the deductions exceeded 2 percent of his AGI.47 Thus, before a household with the median 2018 AGI of $43,61448 could deduct any miscellaneous itemized deductions, those deductions must exceed $872.28.

To help employees who have shifted to working from home, then, Congress should take an alternative approach. Instead of focusing on miscellaneous itemized deductions, it should provide a limited above-the-line deduction for home office expenses. This type of limited deduction for expenses that taxpayers would have to otherwise itemize is not novel. The two most salient examples are the above-the-line deduction for some expenses of teachers and the temporary above-the-line charitable deduction.

In 2002 Congress enacted the Job Creation and Worker Assistance Act. It created a temporary two-year above-the-line deduction for elementary and secondary school educators.49 Because grade school teachers are employees, these expenses would generally be miscellaneous itemized deductions, subject to the 2 percent floor but, for two years, the act allowed educators to deduct up to $250 of these expenses irrespective of whether they itemized and irrespective of whether those expenses exceeded the 2 percent floor.50

Although it was meant to be temporary, in 2004 Congress renewed it for two more years. At that time, the JCT explained that Congress “recognized that elementary and secondary educations often incur substantial unreimbursed expenses in the course of their teacher duties, and believed that an extension of the deduction for such expenses was warranted to continue to provide tax relief to educators who incur such expenses on behalf of their students.”51 Congress continued to temporarily renew the above-the-line deduction until 2015, when it made the deduction permanent and claimed to index it to inflation.52

Similarly, as part of the Coronavirus Aid, Relief, and Economic Security Act, Congress created a limited above-the-line deduction for charitable contributions. Deducting charitable contributions differs in one significant way from teachers deducting specified expenses or employees deducting home office expenses: The charitable deduction is an itemized deduction in its own right and not a miscellaneous deduction.53 Because it’s an itemized deduction, the roughly 90 percent of taxpayers who do not itemize get no tax benefit from their charitable contributions. To encourage charitable giving during the pandemic, Congress created the temporary above-the-line deduction. As with educator expenses, the deduction was limited — a non-itemizing taxpayer could deduct charitable contributions of up to $300 above the line.54

Congress should similarly provide relief for self-employed taxpayers who work from home and whose expenses are disallowed as a result of both the elimination of miscellaneous itemized deductions and the limitations on itemized deductions generally. Even if those expenses continue to be miscellaneous itemized deductions, disallowed until 2025 and significantly limited after that, Congress could and should allow a limited above-the-line deduction for home office expenses of employees.

To qualify for this limited above-the-line home office deduction, an employee would not have to meet the same statutory requirements a non-employee must meet. Rather than being required to have a portion of her home set aside solely for work purposes,55 an employee would only have to demonstrate that she worked from home at least two days per week.

Our proposed above-the-line deduction should also be limited. The deductions for both teachers and charitable contributions have a ceiling. For charitable contributions that ceiling is $300. For teacher expenses, despite Congress’s wanting to index it to inflation, the deduction continues to sit at $250.56 Both limitations are doubled for joint filers.

We propose that the home office expense ceiling be set at $250, the same limit as teachers face for their unreimbursed expenses. We also propose that the deduction be doubled for joint filers, assuming, of course, that each is working from home at least two days per week. We propose this limit because, as a miscellaneous itemized deduction and an unreimbursed employee expense, the home office deduction has more in common with teacher expenses than it does with charitable contributions. Also, the above-the-line deduction for charitable contributions is, so far, a one-year provision, meant to stimulate charitable contributions. Our proposed above-the-line home office deduction, by contrast, is not meant to encourage working from home, but to reflect the reality that it has become increasingly common and will likely continue to grow (at least, after it falls back from the artificial pandemic-induced high of 2020). Allowing the above-the-line deduction is meant to recognize the expenses that employees face as they work from home.

To the extent an employee’s home office expenses exceeded the $250 limitation, any additional deduction would continue to be a miscellaneous itemized deduction. When such deductions return, the taxpayer would need to meet the traditional tests of using the space regularly and exclusively for business purposes, and that use would need to be for the convenience of the employer.

Questions of whether Congress should reinstate miscellaneous itemized deductions go beyond the scope of our proposal. However, to the extent Congress wants to revive deductions for home office expenses exceeding $250, it should think carefully about whether they belong in the miscellaneous deduction basket. Miscellaneous deductions tend to favor wealthier taxpayers, raising significant equity concerns about the deductions’ current categorization.

How do miscellaneous itemized deductions favor wealthy taxpayers? First, the deduction for home office expenses tends to favor more affluent taxpayers who itemize and who can incur large personal residence expenses. Second, the exclusive-use requirement means that a taxpayer must have extra living space. A taxpayer with a home too small to dedicate an area exclusively for use as an office cannot meet that requirement. Finally, the convenience of the employer test could result in arbitrary and inconsistent results between employees. Both tests also pose significant recordkeeping and proof requirements, again resulting in uneven and inequitable treatment among taxpayers. Congress will need to develop a fresh approach if it wants to equitably expand this perennially problematic itemized deduction.

C. Offsetting Deductions

The cost to the fisc of paying for new or enhanced tax deductions is a frequent source of debate and contention. The home office deduction was eliminated before the pandemic to pay for other tax breaks. Because of the unique nature of the home office expense, the costs of a new deduction in the form of reduced taxes may well be offset by the reduction in office rent expense, utilities, and similar costs claimed by employers on their taxes as they reduce the footprints of their places of business.

Although the movement of employees to working from home was not driven by cost considerations at the beginning of the pandemic, employers are focused on reducing the amount of office space they rent as employees continue to work from home after the pandemic. Although the actual numbers have not been calculated, the rent savings will be significant, as well as the reduction of rental expense deducted by the employer.

Similarly, the reduction in tax revenue from allowing a deduction for home office expenses has not been tabulated. The home office expenses incurred by employees in earning their paychecks, however, are real. It seems only equitable to allow the taxpayer a deduction for incurring not only the costs of the home office but also a reduction in quality of life at home because of it.

III. Conclusion

Despite the unprecedented shift of employees working from home triggered by the pandemic, little attention has been paid to the shifting of the costs of office space from the employer to the employee. Employees now routinely surrender traditionally sacrosanct personal space at home, and shoulder the accompanying economic costs, to meet employer-imposed requirements of working from home during the pandemic.

Although the pandemic may eventually be contained, there is growing evidence that many employees will continue to work from home as opposed to returning to the office. Failure to recognize the tax consequences of this new reality may result in arbitrary and inequitable treatment of employees regarding their ability to deduct unreimbursed home office deductions.

Congress could better align the IRC with this changing reality by allowing employees to once again deduct unreimbursed home office expenses. This deduction should be available to many taxpayers by allowing a limited above-the-line deduction of $250 to recognize the very real costs of working from home. If Congress wants to permit an additional deduction for unreimbursed home office expenses above the $250 as a miscellaneous itemized deduction, it should reconsider the deduction requirements given the arbitrary and inequitable results that these tests have created.

FOOTNOTES

1 Section 162(a).

2 H.R. Rep. No. 94-658, at 157-158 (1976).

3 Id. at 160.

4 Section 280A.

5 H.R. Rep. No. 94-658, at 161.

6 Harris v. Commissioner, T.C. Memo. 1983-494; see also Weiner v. Commissioner, T.C. Memo. 1980-317.

7 Commissioner v. Soliman, 506 U.S. 168, 175 (1993).

8 Rev. Rul. 94-24, 1994-1 C.B. 87.

9 Section 280A(c)(1).

10 Cadwallader v. Commissioner, 919 F.2d 1273, 1275 (7th Cir. 1990).

11 Drucker v. Commissioner, 715 F.2d 67, 70 (2d Cir. 1983).

12 Rev. Proc. 2013-13, 2013-6 IRB 478.

13 Section 62(a)(1).

14 Section 62(a)(2).

15 Section 67(b).

16 Miscellaneous itemized deductions. Section 68.

17 Section 67(g).

18 The elimination of miscellaneous itemized deductions has real and perhaps unanticipated consequences on the economy, consequences that go beyond merely disallowing employees’ deductions of home office expenses. By treating employee expenses differently from expenses of independent contractors, professors Shu-Yi Oei and Dianne M. Ring argue, the TCJA may encourage employees with significant expenses to shift to independent contractor status. Oei and Ring, “Tax Law’s Workplace Shift,” 100 B.U. L. Rev. 651, 698 (2020).

19 JCT, “General Explanation of Public Law 115-97,” JCS-1-18, at 72-74 (2018).

21 Jonathan Curry, “Rushed Timeline Blamed for Tax Law Marred by Glitches,” Tax Notes, Mar. 5, 2018, p. 1429.

22 2 U.S.C. section 644(a); Urban-Brookings Tax Policy Center, “Briefing Book: What Is Reconciliation?” (2020).

23 Senate Finance Committee, “Chairman’s Mark and Section-by-Section Summary of the Tax Cuts and Jobs Act” (Nov. 16, 2017).

24 Section 26; IRS Publication 503, “Child and Dependent Care Expenses.”

25 Sections 219 and 401.

26 John Heimbigner, “How Office Space Will Change After a Pandemic,” OfficeSpace blog, May 12, 2020.

28 Megan Brenan, “COVID-19 and Remote Work: An Update,” Gallup (Oct. 13, 2020); see also Andrew Keshner, “Can You Claim the Home Office Tax Deduction if You’ve Been Working Remotely? Here’s Who Qualifies,” MarketWatch, Feb. 24, 2021.

29 Susan Lund et al., “What’s Next for Remote Work: An Analysis of 2,000 Tasks, 800 Jobs, and Nine Countries,” McKinsey Global Institute (Nov. 23, 2020).

30 The average annual cost of providing office space to an employee can range from $4,194 in Atlanta to as much as $14,800 in New York City. Sally French, “Here’s How Much Your Company Pays to Rent Office Space,” MarketWatch, May 27, 2015.

32 Julie Creswell, Gillian Friedman, and Peter Eavis, “Return-to-Office Plans Are Set in Motion, but Virus Uncertainty Remains,” The New York Times, Mar. 3, 2021.

33 “7 Best Practices for Implementing Office Hoteling,” Accruent blog, June 19, 2019; General Services Administration, “Successful Hoteling: GSA’s 10 Tips.”

34 “Desk Booking,” OfficeSpaceSoftware (2021); Dave Clifton, “Hot Desk Booking for a Stress-Free Workplace,” SpaceIQ blog, 2020.

35 Tamara Sheehan, “Quick Tips: How to Make Desk Sharing Work,” SpaceIQ blog, 2020.

36 Net office leasing has dopped more than 14 million square feet since the inception of the pandemic. Steve Brown, “Office Rents Headed Lower Because of the Pandemic,” The Dallas Morning News, Aug. 17, 2020. In Dallas alone, net office leasing is down more than 2 million square feet. Id.

38 Conor Dougherty and Eavis, “Tenants’ Troubles Put Stress on Commercial Real Estate,” The New York Times, June 5, 2020.

39 Under California law, employers may be obligated to reimburse some expenses incurred for remote work. These expenses, however, are typically for items such as cellphones, internet coverage, and similar costs, not the physical costs of maintaining a home office. Melis Atalay, Laura E. Heyne, and Betsy Johnson, “California Employers’ Duties to Reimburse Employees Working From Home During the COVID-19 Pandemic,” Ogletree Deakins (Apr. 19, 2020). Other employer reimbursements also focus on the purchase of actual equipment as opposed to the physical costs of working from home. Annie Nova, “Working From Home? You Might Be Able to Expense a New Desk,” CNBC (June 8, 2020).

40 Macy Bayern, “Why Companies Should Cover the Cost of Office Supplies for Remote Workers,” TechRepublic (Apr. 24, 2020).

41 GSA, “Workplace Standards Benchmarking” (Mar. 6, 2012).

42 Kristi Svec Simmons, “How Much Office Space Do I Need?” AQUILA (June 14, 2018); Jo Cipolla, “How Much Office Space Per Employee Do You Need?” SquareFoot blog, Apr. 9, 2020.

43 Jeff Revoy, “What’s Average About Office Space Per Employee?” SpaceIQ blog, 2020.

44 Section 63.

45 Rev. Proc. 2020-45, 2020-46 IRB 1016.

46 Scott Eastman, “How Many Taxpayers Itemize Under Current Law?” Tax Foundation (Sept. 12, 2019).

47 Section 67(a).

49 Job Creation and Worker Assistance Act of 2002, section 406(a).

50 JCT, “General Explanation of Tax Legislation Enacted in the 107th Congress,” JCS-1-03, at 246-247 (Jan. 24, 2003).

51 JCT, “General Explanation of Tax Legislation Enacted in the 108th Congress,” JCS-5-05, at 139 (May 31, 2005).

53 Section 67(b)(4).

54 CARES Act, section 2204(a).

55 The exclusive use requirement benefits taxpayers who can afford larger homes that they can use solely for work purposes. By eliminating this requirement for the above-the-line deduction, not only would the law reduce the administrative burden of proving exclusive use, but it would provide equitable treatment to work-from-home employees who lack extra space in their homes.

56 Rev. Proc. 2020-45, section 3.14.

END FOOTNOTES

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