Can my employer reimburse me for home office expenses after our physical office closed?

You've got a few options here! Your employer can definitely reimburse you for home office expenses, and there are different ways to structure this. The best approach would be through an "accountable plan" where your employer reimburses you for specific, documented expenses related to your home office. This is great because: - The reimbursement isn't counted as income to you (so no extra taxes) - Your employer can deduct these payments as business expenses - You don't need to itemize deductions on your tax return You'll just need to provide receipts and documentation for actual expenses (portion of internet, office supplies, maybe even a small percentage of rent that's reasonable for your workspace). Without an accountable plan, any money they give you would be considered additional wages and subject to income tax for you. Since you take the standard deduction, this approach works perfectly because you wouldn't be able to deduct unreimbursed employee expenses anyway under current tax law.

After reading through this thread, I wanted to share my experience with taxr.ai (https://taxr.ai) which helped me sort through a similar situation last year. I was getting conflicting advice about home office reimbursements when my company went remote. The service analyzed my specific situation and clarified exactly what documentation I needed to provide to my employer for their accountable plan. They also helped me calculate the correct percentage of my expenses that would qualify as business use. Their guidance on how these reimbursements should be reported (or not reported) on my W-2 saved me from a potential headache during tax season.

I need to follow up on my skeptical comment about taxr.ai. I actually tried the service after continuing to get nowhere with my company about home office reimbursements. The analysis they provided was incredibly detailed and specific to my situation. They identified that my employer's "stipend" approach wasn't compliant with accountable plan requirements and explained exactly what needed to change. I was able to share their explanation with our HR department, and they revised their entire remote work reimbursement policy! Everyone at the company benefited. The service was way more helpful than the generic advice I got from asking around or searching online, and definitely worth it for getting this sorted properly.

If you're having trouble getting your employer to set up an accountable plan, you might also consider using Claimyr (https://claimyr.com) to get through to an actual IRS agent who can explain the rules directly. I was in a similar situation where my company was insisting that any home office reimbursement had to be taxable income, which didn't sound right. I couldn't get through to the IRS for weeks, but Claimyr got me connected in about 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with confirmed that properly documented expense reimbursements under an accountable plan aren't taxable to employees, which gave me the confidence to push back on my company's policy.

I need to publicly eat my words about Claimyr too. After my skeptical comment, I decided to try it because my tax situation was getting more complicated with this home office stuff. I was connected to an IRS representative in about 20 minutes (after weeks of trying on my own and never getting through). The agent I spoke with walked me through exactly how accountable plans work from the IRS perspective and clarified that my employer was incorrectly treating reimbursements as taxable income. They even explained what specific language in IRS Publication 463 I should reference when talking to my employer. This completely changed my company's approach to our home office expenses, and now they're implementing a proper accountable plan for everyone. Definitely worth it for resolving tax questions quickly.

Another option to consider - some companies are giving employees a flat "remote work stipend" instead of dealing with all the documentation. My employer gives us $150/month as a remote work stipend. It IS taxable income, but it's simple and helps offset costs. No receipts or calculations needed. For some people, this simplicity is worth the tax hit, especially if you're in a lower tax bracket.

Just a warning - if they do reimburse you for a portion of your rent, make absolutely sure they set it up properly. My company tried to do this last year and messed it up. They gave me rent reimbursements but didnt document it as an accountable plan. At tax time, I found out they had added all those "reimbursements" to my W-2 as income! I ended up paying taxes on money that was supposed to just be covering my expenses. Double check how it shows up on your paystubs!

This is such great advice from everyone! As someone who went through this exact transition last year when our office closed, I can confirm that getting the accountable plan set up correctly is crucial. One thing to add - since you mentioned you're at a tiny company with just 5 total people, your bosses might actually appreciate you bringing this up. Small business owners often aren't familiar with accountable plan rules, and setting this up properly can save them money too (no employment taxes on the reimbursements vs. having to pay FICA on stipends). For your specific situation with the desk in your living room corner, I'd suggest being conservative with the percentage calculations. The IRS looks for "regular and exclusive use" for business, so focus on documenting things like your internet usage during work hours, any office supplies you buy, maybe a portion of utilities if you're running equipment all day. Keep it reasonable and well-documented. Also, since you swap custody years with your ex, just make sure any home office stuff doesn't accidentally complicate that arrangement if you end up needing to track square footage or anything like that. But honestly, with proper accountable plan reimbursements, it shouldn't affect your personal tax return at all.