Tax Deduction for Home Expenses under COVID-19

More and more employees are working from home under lockdown conditions. Some may even continue to work from home on an indefinite basis.

The Income Tax Act 58 of 1962 (the Act) allows employees to claim tax deductions for home office expenses that will typically include rent of premises, interest on bond, cost of repairs and other expenses relating to the home office, business calls, stationery, share of domestic cleaning fees, office equipment and wear-and-tear.

In terms of the Act, an employee can claim a tax deduction for home expenses if he or she works from home for at least six months of a tax year in a dedicated work area specifically equipped for work. In addition, the home office must "regularly and exclusively used" for such purposes. You won’t qualify if you work on the dining room table or meet clients in the dining room.

Most employees can’t afford to create a designated home office space. Under lockdown, this restriction is not fair especially because work from home employees will see an increase in their electricity, water, telephone and wi-fi bills.

Under lockdown and perhaps even thereafter the state should amend the strict requirements and allow tax deductions to employees that work from home even if they do not have a designated office space. This would be both an additional COVID-19 relief measure and would promote the principles of fairness and equality.