Tools Tax Deduction Act

This bill, called the Tools Tax Deduction Act, would let employees write off more of their work costs on their taxes. It allows workers to subtract the cost of construction tools, personal protective clothing and gear, and other necessary on‑the‑job expenses from their income before taxes, if those costs are needed to do their job as an employee. It also brings back the ability to claim other job‑related costs as itemized deductions. For those, the usual “2% of income” threshold would apply, but only these job‑related costs would count toward that threshold.

Key points:

• Who is affected: Employees who must pay for their own tools, protective gear, or other required work expenses.
• What changes: These specific costs could be deducted “above the line” (subtracted from income even if you don’t itemize). Other job costs could be itemized again and would be subject to the 2% rule, which would only consider these job costs.
• When: The changes would apply to tax years starting after December 31, 2025.