I am a fully remote worker. Does this make my internet tax write off?

Rate this post


If you’re one of the millions of people who work from home full time, you know how important it is to have high speed internet. But while the employer usually provides the computer and necessary applications, home workers are usually responsible for their own internet – which can get expensive pretty quickly if you look fastest connection.

tips-tax.png

However, your employer may be required to reimburse you for some or all of the necessary expenses, including Internet service. You may also be able to deduct your internet costs tax season is here. Check out what it takes to qualify for reimbursement on your internet bill below.

Read more: Broadband nutrition labels are now mandatory for all ISPs

Employer reimbursement for home Internet varies by state

No federal law requires companies to compensate remote employees for home expenses, such as Internet service. The only exception is if said expenses reduce the employee’s average hourly wage below the federal minimum of $7.25, according to the Department of Labor.

State employment laws may require employers to cover at least part of the Internet bill or other costs of working from home. Californiafor example, states in Labor Code 2802 that the employer “shall indemnify his employee for all necessary expenses or losses incurred by the employee in direct consequence of the performance of his or her duties.”

A laptop -- with the CNET logo on the screen -- sits open on a desk.

This is my humble WFH setup.

David Anders

For remote workers, the cost of home internet can certainly be considered a “necessary expense”. It may only be “necessary” when the employee has no choice but to work from home. If coming into the office is an option, but the employee chooses to work remotely, reimbursement for home office expenses, including Internet, is not guaranteed.

A few select states — Illinois, Montana, New Hampshire, North Dakota and south dakota, plus Washington, DC — have similar laws. Most don’t, like my home state South Carolina. In such countries, a generous company may help cover internet or other work-from-home costs voluntarily or upon request, but I wouldn’t count on it.

What to expect if you’re eligible for home internet reimbursement

We use the Internet for much more than work. Since the employer is only on the hook for work-related expenses, it technically doesn’t need to cover the time spent in the streaming internet or any other extracurricular activities. If I worked 180 hours during an Internet billing cycle that spanned 720 hours, my employer would only have to cover a quarter of my bill — and that’s only in states where the laws require it.

Likewise, the employer would not be required to compensate me for data overage charges, since so many non-work activities also contribute to my monthly data usage. Regardless of who pays the internet bill, it’s better to just avoid the overage altogether, like manage internet data usage or switching to a unlimited data provider.

Even in states where the laws require it, calculating how much your employer owes you can be a bit complicated, and for some, more trouble than it’s worth. Some employers can keep things simple by offering remote employees a monthly stipend. The designated amount can go toward internet bills, home office equipment, or other expenses incurred as a result of working from home. If it covers the entire internet bill, great. If not, at least it’s something.

What if I’m in one state and my employer is in another?

Generally, wage and compensation laws apply to the state where the employee physically does the work, not the state where the company is located.

If I live in South Carolina but work remotely for a company based in Washingtonthe employer will be required to meet minimum wage requirements in South Carolina, although Washington has them the highest state minimum wage. The same logic applies to the eventual reimbursement of home internet costs.

What if I live in California but my employer is based in a state where work-from-home expenses are not covered? This is a bit more complicated and can vary by state. Such situations may require a conversation with HR or, in serious cases, an attorney specializing in employment law.

Are home internet costs tax deductible?

Another swing and miss here. The The IRS makes it clear that employees (if you receive a W-2, that means you) are not allowed to claim the home office deduction.

Vertical-700712909.jpg

Jose Luis Pelaez Inc/Getty Images

The Tax Cuts and Jobs Act of 2017 suspended tax write-off for household deductions for employees until 2025, so the deduction may return in the future.

As with any good tax law, there are some exemptions from the home office deduction for employees. Eligible K-12 educators may qualify for the deduction, along with employees who incur disability-related work expenses, reservists in the armed forces, skilled entertainers, and state or local government employees on a fee basis.

Better luck for the self-employed

Work from home freelance and small business owners may qualify for the home office deduction. Conditions apply but the basic qualification, according to the IRSis that the residence is the principal place of business and there is “exclusive use of part of the home for the regular conduct of business.”

Those who qualify and rely on the Internet to conduct business must include Internet costs with utility costs when filing Form 8829. If the taxpayer uses the same Internet service for work and general home use, only the portion used for work may be deducted.

Fortunately, there are other ways to save

Internet service is a necessary expense when you work from home, but employers are not required to help cover Internet costs in many states, and there are no tax credits available. There are others practical ways to reduce your home internet bill. Using your own Wi-Fi equipment, downgrading your plan or switching to another provider are just a few ways you can save on home internet.

See more ways to save around your home CNET’s Home Tips section. For more information on possible tax breaks and taxes in general, be sure to visit CNET’s Tax Center page.



 
Report

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *