Can the Teachers’ Deduction Exceed $300?
Congress, recognizing that most classroom teachers spend a significant amount of their own money on classroom supplies, granted them a special deduction of $250 (indexed for inflation after 2015 and is $300 starting for 2022 returns) as an adjustment to gross income
Eligible educators are those who work in a school as teachers of kindergarten through grade 12, instructors, counsellors, principals, or aides for at least 900 hours during a school year. Because of the hours requirement, many substitute teachers will not qualify for this above-the-line deduction. Many conscientious teachers spend far more than this $300 deduction for classroom supplies every year.
What are the options for teachers who spend more than $300 on classroom supplies or for teachers and other qualified individuals who do not meet the 900-hour test or other requirements to deduct the $300 above the line? When eligible, teachers should always claim the above-the-line deduction first; then, they should consider the following for the excess. This advice may also help their ineligible colleagues.
Employee Business Expense
One option is to claim classroom supplies beyond the $300 deduction as employee business expenses on Form 2106. However, employee business expenses are tier 2 miscellaneous itemized deductions suspended through 2025 by the TCJA, so that is not a current option. However, it could apply on the state tax return if the teacher’s resident state doesn’t follow the TCJA suspension.
Charitable Contribution
Another option would be to claim the expenses as a charitable contribution.
Code Sec. 170(c)(1)) For the purposes of this section, the term “charitable contribution” means a contribution or gift to or for the use of a State, a possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia, but only if the contribution or gift is made for exclusively public purposes.
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Since public schools are part of a political subdivision of a state, any contribution, whether cash or goods, to the school would be a charitable contribution.
Although a controversial workaround to being treated as an employee business expense, if the teacher properly documents them and the school provides a written acknowledgment, the classroom supplies would qualify as a noncash charitable contribution.
Caution: Supplies or equipment that the teacher retains would not be considered a completed gift, and their cost would not qualify as a charitable contribution. For example, if a science teacher purchases a microscope that students use in the classroom but keeps it for personal use when the school year ends, the cost of the microscope would not be deductible as a charitable contribution.
The documentation must meet the requirements for noncash contributions and the teacher claiming a contribution to the school must obtain and keep the required acknowledgment from the school. Some schools may not be willing to provide the documentation, as the teacher’s contract may require the school to pay for all supplies.