Q

Q

Is rent tax-deductible?

A

A

No, you cannot deduct your rent on your federal tax return. However, self-employed taxpayers and businesses may be able to deduct rent from business property, including through the home office deduction.

Derek Silva

Derek Silva

Published April 22, 2020

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The IRS defines rent as any amount you pay to use property you don’t own. There is no way to deduct rent for your home on your federal income tax return, whether or not it’s your primary residence.

If you are self-employed (or otherwise own a business), and you use your residence or another property for your business, you may be able to deduct a portion of your rent as a business expense. The most common way to deduct rent as a business expense is through the home office deduction.

Note that before the tax reforms from the Tax Cuts and Jobs Act of 2017, workers could potentially deduct some home office rent as a miscellaneous itemized deduction (for unreimbursed employee expenses). That deduction isn’t available from 2018 to 2025.

Get more help filing taxes with our guide to 2020 income taxes.

In this article:

The home office deduction

Self-employed individuals (tax filers subject to self-employment tax) who have a home office can deduct a portion of their home’s rent based on the portion of their home that is their office. This is generally determined using square footage. So if you use 30% of your home as an office, you could be able to deduct 30% of your home’s rent as a business expense. You can also deduct a portion of other household expenses, like electricity or renters insurance.

To qualify for the home office deduction, you must use your office space exclusively for business. You can’t live in it or use it for any other purposes (like renting out for weekends to make extra money). Your home office doesn’t need to be a full room, and you can also deduct expenses for a second location you rent for meeting clients, customers, or patients.

Learn more about how to claim the home office deduction.

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State tax breaks for renters

Some states offer a tax credit, tax deduction, or property tax rebate for low-income renters. To claim a credit, you may need to attach a rent certificate or similar document from your landlord verifying the dates you paid rent and the total amount you paid.

States with a tax break for renters:

  • California
  • Hawaii
  • Indiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey
  • New York
  • Vermont
  • Washington, D.C.
  • Wisconsin

A dozen states offer a tax break for senior renters or renters with disabilities:

  • Arizona
  • Colorado
  • Connecticut
  • Iowa
  • Missouri
  • Montana
  • New Mexico
  • North Dakota
  • Oregon
  • Pennsylvania
  • Rhode Island
  • Utah
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Personal Finance Expert

Derek Silva

Personal Finance Expert

Derek is a tax expert at Policygenius in New York City. He has written about multiple personal finance topics in the past, and his work has been covered by Yahoo Finance, MSN, Business Insider and CNBC.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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