H.R. 5334, Supporting Early-childhood Educators’ Deductions Act

H.R. 5334 would allow early-childhood educators to deduct classroom expenses from their taxable income. Under current law, certain primary- and secondary-school educators may claim an income tax deduction of up to $300 for some unreimbursed classroom expenses. The bill would expand eligibility to teachers, principals, counselors, instructors, and aides at schools and childcare facilities for children under age 6.

The Congressional Budget Act of 1974, as amended, stipulates that revenue estimates provided by the Joint Committee on Taxation (JCT) are the official estimates for all tax legislation considered by the Congress. CBO therefore incorporates such estimates into its cost estimates of the effects of legislation. The revenue estimates for H.R. 5334 were provided by JCT.

The estimated budgetary effects of the legislation are shown in Table 1. The costs of the legislation fall within budget function 800 (general government).

JCT estimates that enacting the bill would reduce revenues by $648 million over the 2026‑2036 period.[1]

Using information from JCT and the Internal Revenue Service (IRS), CBO estimates that implementing H.R. 5334 would increase the IRS’s administrative costs by less than $500,000 annually and over the 2026-2031 period. Any related spending would be subject to the availability of appropriated funds.

CBO’s and JCT’s estimates of the budgetary effects of H.R. 5334 are subject to uncertainty: They are based on underlying projections and other factors that could change significantly. In particular, the estimates rely in part on expectations of the responses of early-childhood educators to changes in the tax code.

The CBO staff contact for this estimate is Ellen Steele. The estimate was reviewed by John McClelland, Director of Tax Analysis.