Sponsors (7)
The bill provides targeted, immediate tax relief for service employees who buy work tools or protective clothing—boosting take-home pay for those workers—while shrinking taxable revenue and creating potential administrative burdens and fairness concerns for other workers.
Employees who perform services (e.g., construction workers) can deduct the cost of work-related tools and required protective clothing as an above-the-line deduction, reducing taxable income immediately and increasing their after-tax take-home pay.
Miscellaneous employee business expenses for service-performing employees are excluded from the 2% itemized deduction floor, making it easier for taxpayers who itemize to claim these work-related expenses.
All taxpayers face a modestly lower federal tax base because the deduction reduces individual tax revenue, which could increase the federal deficit or force offsets elsewhere in the budget.
If the relief is narrowly targeted to specific listed items or occupations, other employees with legitimate work-related expenses will not receive the same above-the-line relief and may face unequal treatment.
The provision could complicate tax administration and compliance because the IRS must define which expenses qualify (e.g., what is "necessary") and may need additional audits or guidance.
Based on analysis of 2 sections of legislative text.
Creates an above-the-line deduction for employee tools, PPE, and necessary workplace expenses and narrows the 2%-of-AGI miscellaneous deduction floor to only employee trade-or-business deductions.
Creates a new above-the-line deduction for employees' trade-or-business expenses for construction tools, personal protective clothing and gear, and other necessary workplace items, effective for tax years beginning after December 31, 2025. It also narrows how the 2%-of-AGI miscellaneous itemized deduction floor is applied so only employee trade-or-business miscellaneous deductions are pooled for that floor. The change increases tax benefits for employees who incur work-related tool and safety-equipment expenses by allowing a deduction whether or not they itemize, and it changes the calculation of the miscellaneous itemized deduction floor to exclude non-employee miscellaneous deductions from that test.
Official title: To amend the Internal Revenue Code of 1986 to allow for deductions for the performance of certain services by a taxpayer, and for other purposes.
Introduced March 18, 2025 by Nikki Budzinski · Last progress March 18, 2025