United States General Services Administration

Interagency Telework Issues Working Group Subcommittee DRAFT Reports

United States Office of Personnel Management

I. Proposal: Revise tax laws to allow home-based telecommuters to use the home office deductions (facilities, equipment, etc.) OR alternatively, specify that home-based telecommuters satisfy existing requirements.

Details:

(1) Need to define 'telecommuter'

(2) Two vague and/or troublesome requirements in the existing tax code for home office deductions are that 'the work arrangement must be for the convenience of the employer' and that 'the business use of the facilities/equipment must be regular and exclusive'. These two requirements could/should be waived for telecommuters, revised for telecommuters, or some other satisfactory alternative.

(3) For telecommuters, the tax law could establish an optional 'standard' home office deduction, based on parameters such as 8 hour days/40 hour workweeks and/or a series of standard estimates of average home office proportions (square feet) of telecommuters' homes.

(4) These and other details can be worked out in conjunction with IRS officials.

II. Proposal: IRS should provide clarification regarding tax ramifications, if any, of telecommuting and state/local jurisdictional boundaries. For example, telecommuters living and working in their homes in one jurisdiction but employed by an organization located in another jurisdiction.

III. Proposal: IRS should provide specific tax guidance for telecommuters. More than 20 million Americans telecommute and the number is growing. Just as there is tax guidance for small businesses, investment income, etc., there should be guidance specific to telecommuting.

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