Due to the 2018 IRS Tax Law, W-2 employees lose out on most work expense deductions including home office deduction, as I understand it. And for this year, you cannot use the home office deduction due to covid. Has to pass the test for the "convenience of the employer" rule. New York is one of several states which still allow unreimbursed employee deductions and, perhaps, home office deduction.

What I'm wondering is can I declare that I have a home office for my New York State return but not for IRS? What I'm getting it is if IRS is not going to apply the home office deduction for me, why should they know if I have a home office or not? All it does is put a target on my back. If they're not going to deduct it, what am I gaining? But for New York State, they will deduct employee expenses and, possibly, home office deductions. Using Tax software such as TurboTax, is there a way to declare that I'm using a home office for New York State Tax Return but not declare it for my Federal Return?

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    The last sentence changes this question from being about tax rules to one about how to use a particular piece of software. – chepner May 17 at 20:51
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    I'm not aware of any changes to the ability to claim a home-office deduction in 2018. What changed was the need to do so in many cases, as the much higher standard deduction made itemizing unnecessary for many people. – chepner May 17 at 20:56
  • Well, I'm not sure if it's a tax rule vs software question. Can you declare you have a home office for State but not declare it for Federal? I'd rather IRS not be aware I have a home office unless it reduces my taxable income. And, for me, perhaps because the use case is W-2 employee, the deduction does not take effect. – user3621633 May 17 at 21:11

This question may have a faulty assumption about which information is shared from tax software to the tax authorities. You are concerned that entering home office info in TurboTax for state purposes may arouse the IRS. However, if home office is irrelevant to your federal return, there should be no reason for TurboTax to inform the IRS about your home office. (Whether the IRS would care if they did, is another question).

Review the 'printable' final federal return before submitting. It shouldn't have any reference to home office, even though you entered your home office information in TurboTax.

  • Thank you for your help. I'll review it again, as I recall seeing home office deduction info on federal return government/Turbo Tax worksheets but maybe the IRS form for home office deduction was not present. – user3621633 May 17 at 21:12
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    Right, worksheets are not sent to the IRS. – Orange Coast- reinstate Monica May 17 at 21:14
  • I just checked. I don't see any mention of home office deduction on any form. I do see it on a worksheet "Employee Home Office Worksheet". Under the title, it reads "Keep for your records". Not sure if it's a TurboTax worksheet or a government worksheet but you're saying worksheets are not e-filed to IRS, only forms, so then that should be OK, I think. – user3621633 May 17 at 21:37

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