Teachers could qualify for new tax breaks in 2026

Teachers who spend their own money on classroom supplies and other learning materials could earn a larger tax break, starting this year.

But they’ll also face a heavier burden to track and report those expenses, which could affect the resources teachers bring into their classroom, particularly in underserved areas, experts warned.

Changes to the educator expense deduction were made under President Donald Trump’s wide-ranging tax and spending bill, known as the One Big Beautiful Bill Act. The Joint Committee on Taxation estimates that the expanded deduction would reduce tax collections by $200 million through 2034.

The bill also permanently removes the ability for filers, like teachers, to deduct so-called “miscellaneous expenses.”

For the 2025 tax year, eligible educators — teachers, counselors, classroom aides, principals and other K-12 instructors at a state-recognized school — with at least 900 hours of annual employment are allowed to claim up to $300 "above-the-line," or $600 for joint filers, if each spouse qualifies. An above-the-line deduction reduces your adjusted gross income.

Qualified expenses include:

• Books and other learning materials, except athletic supplies for health and physical education classes
• Classroom supplies such as paper and art supplies
• Computers, software and related accessories
• Instructional equipment and supplementary materials
• Professional development courses tied directly to teaching

Illinois teachers can also benefit from the state's K-12 Instructional Materials and Supplies credit that provides a $500 tax credit per educator, according to Elizabeth Buffardi, founder of Crescendo Financial Planners in Oak Brook.

Eligible expenses are similar to those under the federal educator expense deduction, such as school supplies and equipment. The state credit is available to K-12 teachers, instructors, counselors, principals or aides in a qualified school, working at least 900 hours during the school year, according to the Illinois Department of Revenue. The maximum credit is $1,000 for married couples filing jointly, who are both eligible educators.

“While these credits are helpful, most teachers spend more than this for their classrooms,” Buffardi said.

Changes for 2026

For the 2026 tax year, the bill's definition of eligible educator will include coaches and interscholastic sports administrators. It also broadens eligible items from "in the classroom" to "as part of instructional activity," according to the legislation.

And an educator's deduction increases from $300 to $350, or $700 for married couples, if both are eligible educators, according to Buffardi.

However, itemized deductions will be allowed for qualifying classroom expenses without a dollar limit. Taxpayers should be aware of a key caveat under the new rule.

“If you don’t itemize, you get no [extra] deduction at all,” Mark Gallegos, tax partner at Porte Brown, said.

So a teacher who spent $1,400 in qualifying expenses this year could take the $350 deduction, which lowers their adjusted gross income, and because they itemized, they can deduct the remaining $1,050 on their Schedule A. Previously, only $300 would have been deductible.

“If you haven't been able to itemize for the past several years, you’ll want to look to see if you’ll be able to itemize in 2026,” Buffardi said. “With the changes to the itemizing rules, more people may be able to itemize than in the past several years.”

The policy shift should prompt teachers to reassess their tax planning strategies, Florida attorney David Weisselberger said.

“Many educators will be forced to weigh the benefits of the simplicity of the cap on the new deduction against the added complexity of restoring itemized deductions and will likely face significant challenges in doing so, ultimately placing an indirect strain on the resources available for their classrooms as a direct result of their increased financial burdens,” he said.

Changes favor higher-income filers

Teachers who itemize may benefit more because they can deduct everything they spend, but the advantages could skew toward high-income filers, according to Gallegos. Taxpayers who itemize tend to be higher-income or homeowners.

“In practice, lower and many middle-income teachers are less likely to itemize, particularly if they’re renters or have modest mortgage/property tax expenses,” he said. “That means the benefit is tilted toward teachers with higher income or larger itemized deductions.”

Weisselberger said the legislation removed a long-held tax benefit for unreimbursed teachers — miscellaneous expenses.

“Lower-income educators may find that the reduction of miscellaneous expense deductions results in a disproportionate increase in their annual tax liability because they typically rely on credits, rather than itemizing deductions and/or utilizing the standard deduction,” he stated in an email.

Nearly every teacher spends their own money on classroom supplies, regardless of the school's location and resources, said Bridget Eaglin, a longtime early childhood educator at public and private schools in Chicago and the northwest suburbs.

Many common items teachers buy, like sticky notes and project materials, are often unreimbursed since most spend more than the $300 cap, and many teachers don't itemize their expenses, a rather laborious task.

Eaglin, who taught preschool last year at St. Paul of the Cross in Park Ridge, estimated as many as half of teachers ultimately front the bill. In Illinois, the average teacher spent about $890 out of pocket on schools supplies during the 2024-2025 school year, according to a survey by crowdfunding site AdoptAClassroom. Nationally, the figure was $895.

The resource gap between school districts is a perennial concern for students, teachers and parents, educators told the Chicago Sun-Times.

In better-resourced school districts, most supplies are provided by the school, parent-teacher organizations and community fundraising efforts.

“In under-resourced or inner-city schools, teachers often dig deeper into their own pockets to fill the gaps,” Gallegos said. “When the tax system removes or sharply limits deductions for those costs, it increases the real net cost to those teachers."