Educator Expense Deductions Under OBBBA

The One Big Beautiful Bill Act (OBBBA) makes significant changes to the educator expense deduction—for 2025 and beyond. If you are a teacher, a coach, a counselor, or some other school professional, here’s what you need to know to maximize your tax savings.

Current Rule for 2025

For 2025, eligible educators may claim an above-the-line deduction of up to $300 for classroom-related expenses. An above-the-line deduction reduces your adjusted gross income (AGI), which is always a tax advantage.

Unfortunately, any expenses above $300 are not deductible in 2025 because the law permanently disallows them as miscellaneous itemized deductions.

To qualify as an eligible educator, you must work at least 900 hours during the school year as a K-12 teacher, instructor, counselor, principal, or aide at a state-recognized school. Allowable expenses include

• books and classroom supplies, excluding athletic supplies for health and physical education (PE) courses;

• computer equipment, software, and related services;

• other instructional equipment and supplementary materials; and

• professional development courses directly tied to your teaching.

Big Enhancements Starting in 2026

Beginning in 2026, the OBBBA expands and improves the deduction as follows:

• Keeps the $300 above-the-line deduction in place

• Allows expenses above $300 as itemized deductions (if you itemize)

• Expands the definition of “eligible educator” to include coaches and interscholastic sports administrators

• Expands deductible expenses to include athletic supplies for health and PE courses

• Broadens eligible use from “in the classroom” to “as part of instructional activity”

Example. Sally, an 11th-grade teacher, buys a projector for $1,400 in 2026. She deducts $300 above the line and, because she itemizes, deducts the remaining $1,100 on Schedule A. Under prior law, only $300 would have been deductible.

Planning Tip

The enhanced rules help only if your total itemized deductions exceed the standard deduction. With the OBBBA’s expansion of the state and local tax (SALT) deduction, more taxpayers may qualify to itemize starting in 2026.

Regardless of your situation, keep detailed receipts for all educator-related expenses so you can claim every dollar you are entitled to.

Takeaway

For 2025, the maximum deduction remains $300.

Beginning in 2026, the OBBBA makes educator deductions far more valuable by preserving the $300 above-the-line write-off and allowing additional itemized deductions, while also broadening the eligibility criteria and the types of expenses that qualify. Your next step? Check out our Proactive Tax Strategy & Planning for Business Owners. While you're there, take the 2-minute Tax Strategy Assessment and get some free tax strategy ideas.

We provide these articles as general information and not individualized tax advice.  They do not constitute a client relationship with you, and any information provided here should be applied at your own risk.