Can I deduct unreimbursed employee expenses on my tax return?
For most employees, the answer is no.
The Tax Cuts and Jobs Act (TCJA) suspended the federal deduction for unreimbursed employee business expenses through 2025. This suspension has become permanent, and as of the current tax law, employees generally cannot claim these expenses on their federal income tax return.
If you enter expenses in this section of the software, they typically won't affect your federal return. However, some states still allow certain unreimbursed employee expense deductions, so the information you enter may be used when preparing your state return.
Who may still qualify for a federal deduction?
A limited group of taxpayers may still be able to deduct certain unreimbursed employee expenses on their federal return. These exceptions generally include:
- Qualified performing artists
- Fee-basis state or local government officials
- Armed Forces reservists traveling more than 100 miles from home for reserve duties
- Employees with impairment-related work expenses
If you fall into one of these categories, additional federal deductions may be available.
What expenses are commonly considered employee business expenses?
Employee business expenses must generally be ordinary and necessary for your job. In other words, they should be common, helpful, and appropriate for your line of work.
You cannot deduct expenses that were reimbursed by your employer.
Examples of job-related expenses may include:
- Safety equipment, small tools, and supplies required for your work
- Uniforms required by your employer that aren't suitable for everyday wear
- Protective clothing such as hard hats, safety glasses, and safety shoes
Examples of work-related travel expenses may include:
- Meals and lodging while traveling away from your tax home for business
- Laundry and dry-cleaning costs incurred during business travel
- Business mileage driven for work purposes (excluding your regular commute between home and work)
Important: Commuting costs aren't deductible
Driving from your home to your regular workplace is considered commuting and isn't a deductible business expense. Only qualifying business travel during the workday may be eligible.
How does this affect my state tax return?
Several states continue to allow certain unreimbursed employee expense deductions even though the federal deduction is generally unavailable. If your state permits the deduction, the expenses you enter may automatically transfer to your state return and could reduce your state taxable income.
Be sure to review your state's specific rules, as eligibility requirements vary from state to state.