Tax Breaks for Teachers

Evelyn Jacks

Parents and students are not the only ones who incur school supply costs.  Teachers across the country are back at school, preparing for their new classes.  In the process they might be incurring some out-of-pocket costs, which are tax deductible.  Here’s what you need to know and share with your teacher friends to shine a light on some good financial news:

Backdrop:  The Eligible Educator School Supply Tax Credit.  A refundable tax credit for expenses paid by employed teachers for the cost of “eligible school supplies” was first introduced in 2016.  That’s important because if you missed this claim, you could go back and adjust your tax returns from that tax year forward.

In addition, with most teachers working from home due during the pandemic, the 2020 tax year was the first one in which this claim was made for many. Still others missed it entirely during the pandemic as well.  Good news?  Again, you can adjust prior filed returns and save receipts to make the claim in 2024.

How much is the Refundable Credit? For 2024 it’s 25% of up to $1,000 (for a maximum refund of up to $250).

Who is an Eligible Educator?  Eligible educators are those who hold a valid teacher's certificate or early childhood education certificate or diploma.  Eligible supplies include games, puzzles, supplementary books, software, containers, construction paper, items for science experiments (vinegar, seeds, stir sticks), art supplies and stationery items.

New for 2021 and later years:   The following list of prescribed durable goods will also be claimable in addition to the amounts above:

• Calculators (including graphing calculators);
• External data storage devices;
• Web cams, microphones and headphones;
• Wireless pointer devices;
• Electronic educational toys;
• Digital timers;
• Video streaming devices;
• Multimedia projectors;
• Printers; and
• Laptop, desktop and tablet computers, provided that none of these items are made available to the eligible educator by their employer for use outside of the classroom.

Bottom Line:  A tax savings lesson for teachers:  save your receipts for out-of-pocket expenses you have for school supplies you buy.  This can provide a nice refund come tax filing time.