Homomorphic quantum error correction aims to protect quantum data against both unauthorized access and environmental noise during server-based processing. We investigate the algebraic compatibility between quantum homomorphic encryption and quantum error correction, determining precise conditions under which encrypted encoded states remain inside the relevant code space during storage and computation. Our work establishes a necessary and sufficient criterion for an $[[n,1,d]]$ stabilizer code to remain compatible with the restricted transversal block-Pauli masking $U_{\rm enc}(a,b)=(X^aZ^b)^{\otimes n}$, stated explicitly for $[[n,1,d]]$ codes and extending directly to code-space preservation for $[[n,k,d]]$ codes. We verify this condition for standard examples (bit-flip and Shor codes, with the phase-flip repetition code following analogously), derive a practical criterion for Calderbank-Shor-Steane codes, and extend the analysis to three-dimensional color codes. A critical challenge emerges for non-Clifford gate implementation: the Shor code lacks a naive transversal $T$-gate implementation of the desired logical operation on encrypted encoded data. We present two routes around this obstruction. First, suitable triorthogonal codes admit transversal $T$-type logical implementations, up to Clifford corrections. Second, logical-gate masking gives code-space compatibility for arbitrary stabilizer codes, provided that suitable unitary representatives of the required logical gates are available. These results separate code-space compatibility from a full cryptographic security proof and provide explicit criteria for combining error correction with homomorphic processing in cloud quantum computing.