Sponsors (5)
The bill gives targeted, mostly middle-class workers immediate tax relief for certain work-related purchases, but does so at the cost of reduced federal revenue, added tax administration complexity, and potential unequal treatment of other employees.
Construction workers and other service employees who buy tools, required protective clothing, or incur covered work expenses can claim above-the-line deductions (and thus lower taxable income immediately), increasing after-tax take-home pay even if they don't itemize.
Miscellaneous employee business expenses for service-performing employees are removed from the 2% itemized deduction floor, making it easier for taxpayers who do itemize to claim legitimate work-related expenses.
All taxpayers may face modestly higher federal deficits or need offsetting revenue/savings because the new deductions reduce individual income tax receipts.
The IRS and taxpayers may face added administrative and compliance burdens because the agency must define qualifying items and may need increased audits or guidance.
Workers whose legitimate job-related expenses aren't included on the targeted list could be left without above-the-line relief, producing unequal treatment across employees.
Based on analysis of 2 sections of legislative text.
Permits an above-the-line deduction for employee purchases of tools, PPE, and necessary workplace items and revises how employee trade-or-business itemized deductions are treated under the 2%-of-AGI floor.
Introduced March 18, 2025 by Nikki Budzinski · Last progress March 18, 2025
Allows employees to take an above-the-line (adjusted gross income) deduction for certain work-related expenses — specifically construction tools, personal protective clothing and gear, and other necessary workplace items — for tax years after 2025. Also changes how the 2%-of-AGI miscellaneous itemized deduction floor is applied by excluding employee trade-or-business itemized deductions from that floor calculation and specifying which employee deductions count toward the 2% test.