Educator Tax Deductions: What’s Changing Under the OBBBA

Back-to-school season often shines the spotlight on students and on parents stocking up on supplies, clothes, and backpacks. But many teachers also spend their own money on classroom supplies, often without reimbursement. Fortunately, tax law offers some relief. And starting next year, educators will see a new opportunity to deduct even more of these costs under the One Big Beautiful Bill Act (OBBBA).

The Current Above-the-Line Deduction

Currently, eligible educators may utilize the Educator Expense Deduction, an “above-the-line” deduction, which does not require itemizing and directly lowers adjusted gross income (AGI). Reducing AGI impacts eligibility for various other tax provisions with AGI-based limits.

To qualify, individuals must be K–12 teachers, instructors, counselors, principals, or aides who work a minimum of 900 hours during the school year at an eligible school.

For 2025, the maximum deduction is $300 for unreimbursed classroom expenses. Married couples filing jointly can deduct up to $600 if both spouses meet the eligibility criteria, but neither individual can claim more than $300 each. This limit is subject to inflation adjustments, though it may not increase annually.

Qualified expenses include items such as:

• Books and classroom supplies

• Computer equipment and software

• Professional development courses

• Materials used in the classroom

For health and physical education courses, supplies count only if they’re related to athletics.

New Miscellaneous Itemized Deductions

The OBBBA introduces a new deduction option effective in 2026. While it permanently extends the suspension of most miscellaneous itemized deductions initially established by the Tax Cuts and Jobs Act, it provides a targeted exception for educator expenses.

This new provision supplements the existing above-the-line $300 deduction, is not capped at a specific dollar amount, and does not apply the previous 2% AGI floor. For example, interscholastic sports administrators and coaches are eligible, and supplies purchased for health and physical education courses no longer require direct association with athletics.

It is important to note that taxpayers must itemize deductions to claim this benefit. Given that the OBBBA also makes permanent the increased standard deduction from the TCJA, fewer individuals currently opt to itemize. Itemizing will only be advantageous if total deductions exceed the standard deduction for your filing status.

Track your Expenses

If you’re a teacher, coach, or other eligible educator, it’s smart to keep detailed records now. Save receipts, note dates, amounts, and the purpose of each purchase so you’re ready to maximize deductions.