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Federal Tax Deduction for Educators

New Federal Income Tax Deduction for Educators Beginning in the current tax year (2002), teachers and other eligible educators in elementary and secondary schools may claim an above-the-line deduction of up to $250 on their Federal income tax returns for out-of-pocket classroom expenses. The new law applies to private school educators and the deduction may be taken whether one itemizes deductions or not.

Who is eligible for the new tax deduction?

An individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide and who is employed in a school for at least 900 hours during a school year is eligible.
Do I need to possess a teaching credential issued by the State of California (or any other state) in order to claim the deduction?
No.
Does the law apply to educators employed by private schools?
Yes. The law applies to educators employed in any school that provides elementary education or secondary education (grades K-12) as determined by state law. For your school to qualify, provide your administrator(s) with a friendly reminder to file the private school affidavit (required by the State of California) in a timely manner.
What expenses are deductible?
Expenses, not in excess of $250, are deductible if paid or incurred by an eligible educator in connection with books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment (including related software and services) and other equipment and supplementary materials used by the eligible educator in the classroom.
What is an "above-the-line" deduction?
This term refers to a deduction from gross income taken above the bottom line of page 1 of Form 1040. A taxpayer need not itemize deductions (i.e., use Schedule A) to take an above-the-line deduction, and such deductions are not subject to certain restrictions that apply to itemized deductions, such as the 2 percent floor for work-related expenses.
When does the program start and end?
The law will be in effect for two tax years: 2002 and 2003. Therefore, the first opportunity educators will have to take this deduction is when they file their tax returns for the 2002 year, which are due April 15, 2003.
Which law created this opportunity?
The opportunity to claim this deduction was established in the Job Creation and Worker Assistance Act of 2002 (H.R. 3090, Section 406).
Who helped to make this happen?
Among the congresspersons who were instrumental in promoting the teacher tax deduction are: Senator Susan M. Collins (R-ME), Senator John W. Warner (R-VA), Senator George Allen (R-VA), Senator Max Baucus (D-MT), Senator Charles E. Grassley (R-IA), House Ways and Means Committee Chairman William M. Thomas (R-CA), and Rep. Bobby Scott (D-VA).

It would be helpful to express thanks to Representative Thomas, a Californian representing most of Kern and Tulare counties, for supporting important legislation that includes private school educators. The congressman may be contacted via email at bill.thomas@mail.house.gov.

CAPSO and CAPE are committed to promoting equitable opportunities for participation in state and federal programs designed to recruit, promote and retain teachers. After all, private schools are partners in the education of the public. California's private school teachers educate 10% of the public's children in grades K-12 and save taxpayers well over $4 billion, annually. Therefore, extending equitable opportunities and benefits to private school teachers is good public policy.

Save those receipts!
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