Sponsors (5)
The bill provides targeted tax relief and simpler claiming for employees who pay for work-related tools and PPE by allowing above-the-line deductions, but it reduces federal revenue and imposes implementation and administrative costs while leaving workers without qualifying expenses unchanged.
Workers who buy tools, personal protective equipment, or other qualifying employment-related items (e.g., construction and trade employees) can deduct those costs above the line starting in 2026, directly lowering their taxable income and increasing after-tax pay.
Employees who incur work-related expenses will face simpler tax treatment because above-the-line treatment removes the need to meet the 2% miscellaneous itemized deduction floor and reduces the need to itemize to receive the benefit.
All taxpayers could face higher federal deficits or pressure for offsets because expanding above-the-line deductions will reduce federal revenue.
The Treasury and IRS will need to issue new guidance and administer the change, increasing IRS administrative burden and potentially adding short-term tax complexity and audit work for federal employees and filers.
Low- and middle-income employees who do not incur qualifying work expenses get no benefit, so the relief is targeted and does not help all workers equally.
Based on analysis of 2 sections of legislative text.
Allows employees to deduct job-related tools, protective clothing, and other necessary employment expenses above the line and removes them from the 2%-floor miscellaneous itemized deduction.
Introduced March 18, 2025 by Nikki Budzinski · Last progress March 18, 2025
Allows employees to deduct the cost of work-related tools, personal protective clothing and gear, and other necessary employment expenses as an above-the-line deduction (reducing adjusted gross income) and removes those employee-business expenses from the miscellaneous itemized deduction 2%-of-AGI floor. The change applies to taxable years beginning after December 31, 2025, so affected taxpayers would claim the new treatment for 2026 tax year and later.