The educator expense deduction is an adjustment to income, an advantageous above-the-line deduction that's applied before you decide whether to take the standard deduction or itemize your deductions.
The Internal Revenue Service (IRS) radically revamped the 1040 tax form in 2018 and revised it again for the 2019, 2020, and 2021 tax years. The deduction for educator expenses appears on line 11 of the 2021 Schedule 1. The total adjustments to income from Schedule 1, line 26, are then transferred to line 10 of the 2021 Form 1040.
Claiming the Deduction
The IRS allows you to claim the educator expenses deduction if you're a teacher and you've paid for classroom supplies or other materials out of your own pocket during the tax year. You don't have to go through all the fuss and trouble of itemizing to claim it because it's an adjustment to income.
It also reduces your adjusted gross income (AGI), which is important because you can become ineligible for certain tax benefits if your AGI is too high.
You can still subtract the standard deduction or the total of your itemized deductions from your AGI to arrive at your taxable income. Adjustments to income, including the educator expense deduction, are in addition to these other tax breaks.
Qualifying for the Deduction
You must be a teacher, aide, instructor, counselor, or principal to qualify for the educator expense deduction, and you must have worked at least 900 hours during the school year in a school that's certified by your state. The school can be a public, private, or religious institution.
Only grade school and high school educators qualify. People with homeschool, preschool, or college educator costs don't qualify for this deduction.
If you begin your teaching career in September, you most likely would not be able to claim the deduction in that year because you wouldn't reach 900 hours by December 31.
What Expenses Can Be Deducted?
Most things you spend money on as an educator qualify for the deduction, provided that you bought them for use in your classroom and your school or teacher's union hasn't reimbursed you for them. The supplies must be "ordinary and necessary." They're items that are commonly accepted and used in a classroom, and your students benefited from them.
Some common deductible expenses include:
- Computer equipment, software, and services
- Supplementary materials used in the classroom
- Health or physical education courses related to athletics
The Tax Relief Act of 2020 additionally allows you to deduct expenses for supplies necessary to prevent the spread of COVID-19 in classrooms, including:
- Face masks
- Disposable gloves
- Hand soap and sanitizers
- Air purifiers
- Tape, chalk, or paint to mark off areas of social distancing
- Physical barriers, such as plexiglass
Other items can be eligible as well if they're recommended by the Centers for Disease Control and Prevention (CDC). These expenses must have been incurred after March 12, 2020.
You can also deduct the costs of professional development courses you take—presuming that no one reimburses you.
The U.S. Department of Education reported in 2018 that the average teacher's out-of-pocket spending on school supplies was $479. The amount you can claim as an educator expense is capped at $250 for the 2021 tax year, however. You can each claim up to $250 in expenses for a total of $500 on a joint tax return if both you and your spouse are educators.
One spouse can't claim $300 while the other spouse claims $200 for the $500 total. Each spouse's qualifying expenses are capped at $250.
For the 2022 tax year, the amount for each educator increases to $300.
Other Restrictions and Limitations
Your deduction can be reduced by certain factors. You must subtract from your deduction any tax-advantaged funds, such as from a Coverdell education savings account, that you used to pay for your own schooling or professional development courses.
Your deduction is limited to the amount of your teaching expenses that exceed any interest earned on Series EE or U.S. savings bonds if you've excluded this interest from your taxable income because you used the money to pay for educational expenses.
Employee Business Expenses
It used to be that you could deduct the balance of your expenses as unreimbursed employee business expenses if they exceeded the $250 limit. But this required that you itemize your deductions and it was a miscellaneous deduction. The Tax Cuts and Jobs Act eliminated that deduction beginning in 2018 through at least 2025.
Keep Accurate Records
It's a good idea to keep a file dedicated to your educator's expenses. Save receipts and make notes as to what you purchased, when you made the purchases, and why.
The Protecting Americans from Tax Hikes (PATH) Act of 2015 made the above-the-line educator expense deduction permanent, however, and it indexed it for inflation, too. Although the limit has remained at $250 from 2015 through 2021, it increases by $50 for 2022.
- The IRS allows elementary and secondary school teachers to claim up to $250 of qualified expenses as an above-the-line adjustment to income.
- In 2022, that amount increases to $300.
- You do not need to itemize deductions to take advantage of this deduction.
- You can also apply the deduction to expenses incurred to reduce the spread of COVID-19 in the classroom.