Can You Deduct Your Home Office When You're an Employee?

Many employees work at least part of the time at home. If you use a home office for work, can you take the home office deduction? Not anymore. The One Big Beautiful Bill Act in 2025 permanently eliminated the home office deduction for employees. The deduction remains available if you're self-employed or a small business owner using part of your home for business activities.

In the past, employees could have taken this deduction. But there were a lot of hoops to jump through. This article covers those requirements, even though the deduction is no longer available to employees. In addition, it covers current requirements for taking the home office deduction if you're self-employed or a small business owner.

Convenience of Employer Test

Employees could only take the home office deduction if they maintained the home office for the convenience of their employer. An employee's home office was deemed to be for an employer's convenience only if it was:

• a condition of employment
• necessary for the employer's business to properly function, or
• needed to allow the employee to properly perform their duties.

The convenience of employer test wasn't met if using a home office was for your convenience or because you could get more work done at home. For example, you wouldn't pass the test if you had an outside office provided by your employer but liked to take work home with you.

However, you would have passed the test if your employer didn't provide you with an office, or if there was some valid business reason why you had to work at home. In one case, for example, an employee was entitled to the home office deduction because her employer required her to perform work during off-hours when her regular office was closed.

Because the home office is no longer available to employees, try to get your employer to reimburse you for your home office expenses if you regularly use your office for work. The reimbursement wouldn't be taxable income so long as you properly account for your expenses.

Home Office Deduction Requirements

If you're self-employed or have a business (that is, you're not an employee) and want your home office to be deductible, you must use a part of your home regularly and exclusively for work.

You Must Use Your Home Office Exclusively for Business

You can't take the home office deduction unless you use part of your home exclusively for your business. In other words, you must use your home office only for your business.

The more space you devote exclusively to your business, the more your home office deduction will be worth. If you use part of your home, such as a room or studio, as your business office, but you also use that space for personal purposes, you won't qualify for the home office deduction.

Additional Home Office Deduction Requirements

Using a home office exclusively and regularly for business isn't enough by itself to qualify for the home office deduction: You also must satisfy at least one of the following additional tests:

• Your home office is your principal place of business.
• You regularly and exclusively use your home office for administrative or management activities for your business and have no other fixed location where you perform such activities.
• You meet clients or customers at home.
• You use a separate structure on your property exclusively for business purposes.
• You store inventory or product samples at home.
• You run a daycare center at home.

Home as Principal Place of Business

The most common way to satisfy the additional home office deduction requirement is to show that you use your home as your principal place of business. How you accomplish this depends on where you do most of your work and what type of work you do at home. If you do all or almost all of your work in your home office, your home is clearly your principal place of business, and you'll have no trouble qualifying for the home office deduction.

If you work in more than one location, your home office still qualifies as your principal place of business if you perform your most important business activities (those activities that most directly generate your income) at home. If you perform equally important business activities in several locations, your principal place of business is where you spend more than half of your time.

You Do Administrative Work at Home

You can also qualify for the home office deduction if you use the office to conduct administrative or management activities and have no other fixed location where you perform such activities. Administrative or management activities include, but aren't limited to:

• billing clients or patients
• keeping books and records
• ordering supplies
• setting up appointments, and
• writing reports.