Home Office Deduction for Remote Workers: Employee vs Self-Employed

By the SOJI editorial team · Reviewed 2 November 2026

The home office deduction lets some people subtract part of their home costs from their US taxable income. According to the IRS, it is built for people who use part of their home for business, which usually means self-employed workers, not employees who work from home.

Key takeaways

• The IRS requires regular and exclusive use of the space, and it must be your principal place of business.
• Space that is only "appropriate and helpful" for the work does not qualify.
• In IRS Publication 587, a flowchart sends someone using the space as an employee to "No deduction."
• Contractors on Schedule C may qualify; check the rules before you claim.

Who the IRS says can claim it

The IRS home office page states that the deduction is available to homeowners and renters and applies to all types of homes. The home must meet two tests: the space is used regularly and exclusively for business, and it is your principal place of business. A space can also qualify if you meet clients there in the normal course of business. The page notes that use which is merely appropriate and helpful does not count, and it says it is a historical page that may not reflect current law, so confirm against current forms.

Publication 587 covers the detail. Its rules apply to individuals, and it lists self-employed people filing Schedule C, partners and farmers among the users. It also describes a simplified method of $5 per square foot, up to 300 square feet, in its worksheets. The publication points readers to IRS.gov/Pub587 for legislation passed after it was written, so check that page for changes.

What this means for an employee

If an employer hires you and you work from your spare room, the Publication 587 flowchart for the question "are you using the part of your home as an employee?" ends in no deduction. If the job creates costs, the usual route is employer reimbursement: see /blog/remote-job-technology-and-equipment-requirements-what-employers-expect for who pays for equipment. Some US states have their own rules on reimbursing work expenses; /blog/remote-jobs-for-california-residents-what-you-need-to-know covers one example.

What this means for a contractor

If you work as an independent contractor, the home office deduction may apply, subject to the exclusive-use test. A desk in a shared living room generally fails it. Keep the following records:

• A floor plan or measurements of the dedicated space.
• Rent or mortgage interest and utility bills, with receipts.
• Notes on how the space is used only for the work.

Your classification as contractor or employee decides everything here. The IRS explains the three factors on its independent contractor page. Compare the two paths in /blog/remote-job-vs-freelance-which-fits-you, and use the /freelance-calculator to see your costs.

Frequently asked questions

Can I deduct my home office if I work remotely for an employer?

According to the IRS publication's flowchart, using the space as an employee leads to no deduction. Ask a tax professional about your situation.

Does a corner of my bedroom count?

Only if the area is used regularly and exclusively for the work. Mixed personal use generally disqualifies it.

Is there a simpler way to calculate it?

The IRS publication describes a simplified method of $5 per square foot with a 300 square foot limit. Check the current instructions for who can use it.

Limitations

This is general information about US federal guidance, not tax advice. Tax law changes, other countries have different rules, and state taxes may differ. Confirm with the current IRS pages or a qualified tax professional before you file.

Sources and further reading

• IRS: Home Office Deduction: The IRS page on the home office deduction: regular and exclusive use and principal place of business.
• IRS Publication 587: Business Use of Your Home: IRS Publication 587 on business use of your home, including the simplified method.
• IRS: Independent Contractor (Self-Employed) or Employee?: how the US tax authority separates contractors from employees

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