The IRS is providing a safe harbor for eligible educators to deduct certain unreimbursed COVID-19-related expenses. The safe harbor applies to expenses for personal protective equipment, disinfectant, and other supplies used for the prevention of the spread of COVID-19 in the classroom, paid or incurred after March 12, 2020. All amounts remain subject to the $250 educator expense deduction limitation.
Deduction for Educator Classroom Expenses
Employees generally cannot deduct unreimbursed business expenses as miscellaneous itemized deductions in tax years 2018 through 2025. Despite this general rule, teachers may be able to treat some of their unreimbursed classroom expenses as an “above the line” deduction and deduct them from gross income. An eligible educator can deduct up to $250 each year for classroom expenses (Code Sec. 62(a)(2)(D)). Deductible expenses include those for books, supplies, and computer equipment used in the classroom. An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year.
COVID Act Expands Eligible Expenses
The COVID Tax Relief Act of 2020 (P.L. 116-260) requires the Secretary of the Treasury to clarify that COVID-19 protective items used for the prevention of the spread of COVID-19 paid or incurred after March 12, 2020 are eligible educator classroom expenses. As a result, the IRS has issued a safe harbor revenue procedure.
Under the revenue procedure, COVID-19 protective items include face masks; disinfectant for use against COVID-19; hand soap; hand sanitizer; disposable gloves; tape, paint, or chalk used to guide social distancing; physical barriers (such as clear plexiglass); air purifiers; and other items recommended by the Centers for Disease Control and Prevention (CDC) to be used for the prevention of the spread of COVID-19.
The revenue procedure applies to such unreimbursed expenses paid or incurred after March 12, 2020. All amounts remain subject to the $250 educator expense deduction limitation.