Tax Deduction Rules for Remote Employees

As the owner and operator of Schuyler Brown Land Title in Mt. Sterling, Illinois, Heidi Scott completes due diligence research into real estate titles and deeds. Heidi Scott is also an Illinois-registered tax attorney and provides tax law guidance to businesses and individuals. The recent surge in employees working from home has raised important questions about business expense tax deductions.

Illinois is one of several jurisdictions that require employers to reimburse employees for any costs related to their work duties. This may include software or internet connection expenses. Employers in the state that require their employees to work from home should review their reimbursement policy and be sure it aligns with the stipulations of the Illinois Wage Payment and Collection Act.

At the federal level, since remote workers are classified as employees, they do not qualify for any of the deductions afforded to self-employed individuals such as the home office deduction or work-related travel expenses. Given the significant increase in the number of remote workers, it’s expected that the IRS may enact changes to the tax code in the near future to account for this change.