Educator Expense Deduction

What Is the Educator Expense Deduction?

The educator expense deduction is an adjusted gross income (AGI) deduction for teachers and other education professionals for up to $250 of out-of-pocket expenses. This deduction allows eligible educators to deduct unreimbursed expenses related to education. Qualified expenses include books and supplies used in the classroom and any technology or software necessary to teach students.

It used to be that schools supplied students with everything they needed to gain an education from kindergarten through grade 12, including costs to compete in athletics or participate in after-school groups.

That’s no longer the case. Cuts in educational funding now make it necessary for students and teachers to pitch in on everything from tissues for the classroom to gas money for sports team travel.

How the Educator Expense Deduction Works

The educator expense deduction provides a tax break for up to $250 of education-related expenses. Married couples who file jointly can deduct up to $500—but not more than $250 each—if both spouses are eligible educators. To qualify for the deduction, you must work:

• As a school teacher, counselor, classroom aide, principal, or an instructor
• In a school for at least 900 hours during the school year
• In a kindergarten through grade 12 classroom
• For a school that provides elementary or secondary education as determined by state law (may include public, private, and religious schools)

Deductions related to homeschooling are not allowed. And educators who work in preschool environments—or undergraduate or graduate school settings—can’t take this deduction.

Qualified educator expenses include “ordinary and necessary expenses paid for”:

• Professional development courses related to the curriculum or students you teach
• Supplies, books, and supplementary materials used in the classroom
• The cost of computer equipment (including software and services) used in the classroom to teach students
• Health and physical education courses, provided that the expenses are for athletic supplies

Note that an “ordinary” expense is one that’s common and accepted in your educational field. A “necessary” expense is helpful and appropriate for your profession, but it doesn’t have to be required to be considered necessary.

Deduction for COVID-19 Protective Items

Under the COVID-Related Tax Relief Act of 2020, educators also may deduct unreimbursed expenses they have incurred for COVID-19 protective items since March 12, 2020. According to the Internal Revenue Service (IRS), COVID-19 protective items include:

• Face masks
• Disinfectant for use against COVID-19
• Hand soap
• Hand sanitizer
• Disposable gloves
• Chalk, paint, or tape to guide social distancing
• Physical barriers, such as plexiglass dividers
• Air purifiers
• Other items recommended by the U.S. Centers for Disease Control and Prevention (CDC)

Special Considerations

Originally part of the American Taxpayer Relief Act, the educator expense deduction is indexed to inflation, so it doesn’t lose its value over time. Even better is that this deduction comes “right off the top” of your gross income and is not part of itemization. This is an important issue considering recent changes to the tax structure that nearly doubled the standard deduction for many people—thus eliminating the need to itemize.

Limits to the Educator Expense Deduction

According to the IRS, you must reduce your qualified expenses by the following amounts you received during the tax year:

• Excludable Series EE or I U.S. savings bond interest from Form 8815
• Nontaxable withdrawals from your Coverdell education savings account (ESA)
• Nontaxable qualified state tuition program distributions
• Reimbursements for expenses not reported to you in box 1 of your Form W-2

Note that spouses can’t both claim the same expense as an educator deduction, as the IRS does not allow the deduction of the same expense twice. Also, you can’t deduct any out-of-pocket costs for which your school reimbursed you. Finally, you can’t deduct any expenses paid for by grants or similar funding sources.