With tax season upon us, many are wondering how their new work-from-home status might affect their 2020 tax returns.<br />Here are six of the most-asked COVID-related tax questions answered by tax professionals.<br />1. Do I qualify for the home office deduction?<br />You do qualify if you’re self-employed or an independent contractor. If you get a W-2 tax form from your employer, you don’t qualify.<br />2. Are there any new deductions I could be eligible for?<br />If you qualified for but didn’t receive either of the stimulus checks in 2020, you’re eligible for the Recovery Rebate Credit.<br />3. If I work from home in one state but my employer is in another, which state income taxes do I pay?<br />You typically only pay income taxes in the state you reside in. If you performed work in both states before moving to a remote setup, you need to pay income taxes in both.<br />4. I temporarily moved to a different state in 2020. How does this impact my taxes?<br />Even if your move was only temporary due to COVID-19, you may still owe taxes in that state too. The longer your stay, the more likely you have a tax obligation.<br />5. Do I need to pay taxes if I worked part-time and received unemployment benefits or compensation from a work-share program?<br />Yes, because compensation received from a work-share program or Pandemic Unemployment Assistance is taxable income.<br />6. Do I need to pay taxes on the stimulus check I received in 2020?<br />The stimulus check is not taxable income and won’t factor into your refund or any taxes you owe. You do still need to record it on your tax return.
