OBBBA revamps and enhances educator expenses deductions

For 2025, you can claim an “above-the-line deduction” for so called educator expenses.

The above-the-line deduction reduces your adjusted gross income (AGI) and that’s a good thing.

The bad thing is that the 2025 law limits the educator expense deduction to $300. Money spent by the educator in excess of $300 is not deductible because the excess is one of those disallowed 2 percent miscellaneous itemized deductions.

Eligible Educator (2025)

The term “eligible educator” means, with respect to any taxable year, an individual who is a teacher, instructor, counselor, principal, or aide in a school for children anywhere from kindergarten through grade 12, for at least 900 hours during a school year.

School (2025)

The term “school” means any school which provides elementary education or secondary education (from kindergarten through grade 12), as determined under state law.

Allowable expenses (2025)

An eligible educator may- by reason of their participation in professional development courses related to the curriculum in which the educator provides instruction, or related to the students for which the educator provides instruction – deduct the following if used by the educator in a classroom.

Books
Supplies (other than non-athletic supplies for courses of instruction in health or physical education)
Computer equipment (including related software and services)
Other equipment
Supplementary materials

2026 changes and enhancements

Starting in 2026, the OBBBA

Keeps the $300 above-the-line deduction in place;
Removes educator expenses from the disallowed 2 percent miscellaneous itemized deduction category;
Makes educator expenses in excess of $300 deductible as itemized deductions (below-the-line, requiring itemizing to benefit);
Allows athletic supplies for courses of instruction in health or physical education;
Substitutes “as part of instructional activity” for “in the classroom”; and
Adds interscholastic sports administrators and coaches as eligible educators.

Example: Sally, an 11th grade teacher, pays $1,400 for a classroom projector in 2026. She deducts $300 on Schedule 1 (above-the-line) and, because she itemized, deducts the remaining $1,100 on Schedule A. This is a vast improvement over 2025.

Tax Planning

This OBBBA change will do you no good unless you have itemized deductions that exceed your allowable standard deduction.

OBBBA potentially increases your allowable state and local tax (SALT) deduction, making it more likely that you can itemize.

Whether you are limited to the $300 deduction or you have educator expenses that you can itemize, make sure to keep receipts for your educator expenses.

BergerCPAFirst, with over 30+ years of experience, offers comprehensive tax preparation services for individuals and businesses nationwide. Our commitment is to provide personalized attention while ensuring compliance and maximizing tax benefits. If you have any questions or would like to schedule a consultation, please call (201) 587-9200 or send us an inquiry.