The One Big Beautiful Bill Act (OBBBA) delivers a major overhaul to the educator expense deduction, reshaping how teachers and school professionals can claim their out-of-pocket costs. If you’re a teacher, coach, counselor, or administrator, this update could directly affect your take-home pay and how much of your hard-earned dollars stay in your pocket.

The Current Rule for 2025

For tax year 2025, the rules remain straightforward but limited:

• Eligible educators can deduct up to $300 in classroom-related expenses as an above-the-line deduction.
  
• An above-the-line deduction reduces your adjusted gross income (AGI), which lowers your taxable income regardless of whether you itemize.
  
• But here’s the catch: any expenses above $300 are permanently disallowed as miscellaneous itemized deductions under the OBBBA.
  

Who Qualifies?

To be considered an eligible educator, you must:

• Work at least 900 hours during the school year,
  
• Serve as a K–12 teacher, instructor, counselor, principal, or aide, and
  
• Be employed at a state-recognized school.

What Expenses Count?

For 2025, the following can be deducted (up to the $300 cap):

• Books and classroom supplies (excluding athletic gear for PE courses),
  
• Computer equipment, software, and related services,
  
• Instructional equipment and supplementary materials, and
  
• Professional development courses directly tied to your teaching.
  

The Big Enhancements Starting in 2026

Here’s where the OBBBA makes a real difference. Beginning in 2026, the educator deduction expands significantly:

• Keeps the $300 above-the-line deduction in place.
  
• Allows expenses above $300 as itemized deductions (if you itemize).
  
• Broadens the definition of “eligible educator” to include coaches and interscholastic sports administrators.
  
• Expands deductible expenses to cover athletic supplies for health and PE courses.
  
• Shifts the standard from “in the classroom” to “as part of instructional activity”, recognizing that not all teaching happens within four walls.
  

Example

Sally, an 11th-grade teacher, buys a projector for $1,400 in 2026. Here’s how it works under the OBBBA:

• She deducts $300 above the line (like before).
  
• Because she itemizes, she deducts the remaining $1,100 on Schedule A.
  
• Under prior law, Sally would have been stuck at just $300.
  

That’s a $1,100 swing in deductible expenses real money back in her pocket.

Planning Tip

The expanded deduction only helps if your total itemized deductions exceed the standard deduction. But here’s the good news: with the OBBBA’s expansion of the state and local tax (SALT) deduction, more taxpayers will qualify to itemize starting in 2026.

No matter what, keep detailed receipts of every classroom, coaching, or instructional purchase. Documentation is your ticket to maximizing every dollar.

The Takeaway

• For 2025, the maximum deduction remains capped at $300.
  
• Starting in 2026, the OBBBA makes educator deductions far more valuable by:
  
  • Preserving the $300 above-the-line write-off,
    
  • Allowing additional itemized deductions, and
    
  • Expanding who qualifies and what qualifies.
    

For educators, coaches, and school leaders, this means less money lost to taxes and more resources available for students.