Knowledge Base

12883: 8829 - Safe Harbor and Prior Year Carryover

1040 Individual Data Entry

A taxpayer is using the safe harbor option for home office expenses this year, but there is a credit from last year. What happens to that credit?

Beginning in Drake13, the computation of home office expenses can be simplified by electing the simplified method.

Note: In Drake13 through Drake16, the simplified method checkbox was called "Use the safe harbor method." 

If the taxpayer uses the safe harbor method on screen 8829, prior year credit cannot be used, and there is no carryover to next year. The taxpayer can use a prior year credit in a succeeding year when safe harbor is not used. See the references to using the "simplified method" in the Instructions for Instructions for Form 8829 and Pub. 587, Business Use of Your Home.

The prior-year credit is not carried forward on the WKs CARRY worksheet (WK_Carry in Drake15 and prior). You should note the credit on the NOTE screen in Drake so a reminder will update to next year's return.

Related Links

Also In This Category

Article has been viewed 4.6K times.
Last Modified: 8 Months Ago