After the Tax Cuts and Jobs Act (TCJA) tax reform, employee business expenses can be deducted as an adjustment to income only for specific employment categories and eligible educators.
Taxpayers can no longer claim unreimbursed employee expenses as miscellaneous itemized deductions, unless they are a qualified employee or an eligible educator. They must complete Form 2106, Employee Business Expenses, to take the deduction.
If someone falls into one of these employment categories, they are considered a qualified employee:
- Armed Forces reservists
- Qualified performing artists
- Fee-basis state or local government officials
- Employees with impairment-related work expenses
No other type of employee is eligible to claim a deduction for unreimbursed employee expenses.
Here’s what makes something a qualified expense:
- Paid or billed during the tax year
- For carrying on a trade or business of being an employee, and
- Ordinary and necessary
If you have any questions regarding claiming the employee business expense deduction on your tax return, please contact us at (469) 467-4660, or firstname.lastname@example.org.