Stimulus Package Offers Tax Break To Help Teachers

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Each year, kindergarten teacher Mary Lou Roberts opens her wallet to stock her classroom with Magic Markers, glue, spiral notebooks, and recipe ingredients.

Ms. Roberts, who teaches at the Caldwell Early Childhood Center in Nashville, Tenn., said she spends up to $2,000 of her own money annually on supplies for her students, who mostly come from low-income families.

But this year, Ms. Roberts will have a way of recouping some of that cost through a new tax break for educators included in the economic-stimulus package passed by Congress this month. Under the measure, which President Bush signed March 9, teachers, their aides, principals, and counselors can take a federal tax deduction of up to $250 annually for out-of-pocket classroom expenses.

Sen Susan Collins

Budgeters say the modest deduction will save educators $409 million over the next two years. The break would expire at that point, although Sen. Susan Collins, a Maine Republican who sponsored the legislation eventually folded into the larger bill, said she hopes to make it permanent.

Teachers on average spend about $400 of their own money each year on everything from puzzles to pencils, the National Education Association estimates.

In the past, only educators who itemized on their federal income-tax returns could deduct such expenses, and even those deductions were limited. Teachers, along with everyone else, could deduct only work-related expenses exceeding 2 percent of adjusted gross income.

For 2002 and 2003 taxes, the deduction can be made on the 1040 E-Z form. Teachers will be able to claim the deduction for the first time when they prepare their tax returns for 2002, due April 15 of next year.

Sen. Collins, a member of the Senate Health, Education, Labor, and Pensions Committee, said she spent three years trying to get the measure through the House and the Senate.

"So many teachers told me how they spend money out of their own pockets despite their modest salaries," she said. "It's another indication of the dedication of our teachers."

The tax break applies to both public and private school educators in schools from kindergarten through 12th grade. The educator must work in a school for at least 900 hours a school year to qualify. Sen. Collins said she was not able to pass the $400 deduction she had proposed.

"We're pleased that teachers are being recognized for their time and effort on behalf of students," Bob Chase, the president of the National Education Association, said in a statement. "This legislation is especially important because it recognizes that often teachers go above and beyond their regular responsibilities by purchasing materials so that they can be better at their jobs and more helpful to the children they teach."

A Common Practice

This session, Sen. Collins also introduced a bill that would expand college-loan-forgiveness programs for teachers, in line with goals set out by President Bush earlier this month. Her bill would expand loan forgiveness to teachers who focus on subject areas not currently covered by other forgiveness programs.

It's common practice for teachers to spend their own money on classroom items to add to supplies they get through their schools. The custom is so widespread that some companies give teacher discounts or have special teacher programs. The office-supplies giant Staples, for instance, has a teacher-rewards program that mails educators a $10 gift certificate for every $100 they spend on the stores' merchandise.

Ms. Roberts said she wants to have the tools to help her students make ideas concrete and to make her classroom comfortable for learning. She has spent her own money on a bright red rug and curtains, for instance, and for years has made sure each student has his or her own set of crayons. Her dollars also go to buy ingredients for recipes the students help cook.

"If you're reading to a child and you say, 'The fire is sizzling' and they haven't ever heard that sizzle, it makes it hard to relate," Ms. Roberts said. "It's just easier to teach when you have the things to make it real to the children."

Some say the tax break is nothing more than a nice gesture and doesn't tackle an underlying problem of poorly paid teachers, underfunded school districts, and a lack of supplies and resources.

Bill Cunningham, a lobbyist with the American Federation of Teachers, said his organization supports the deduction. However, he said, teachers shouldn't have to reach into their own wallets in the first place.

"All of these things, while well-intentioned, are really not getting to the problem," he said. "It's education on the cheap, essentially."

Several years ago, Idella Harter, the president of the Maine Education Association, an NEA affiliate, told Sen. Collins that she had tracked her own receipts as a teacher from September to March and found she had spent more than $1,000 of her own money on school supplies. That story spurred Ms. Collins to action.

The new tax break will offset at least some of those expenses, Ms. Harter said. The amount, however is unlikely to ignite delirium in teachers' lounges. For example, a teacher filing jointly, with an income of about $45,000 and taking the maximum deduction, would fall into the 15 percent tax bracket and save $37.50. A teacher filing jointly with income of $100,000, on the other hand, would fall into the 27.5 percent tax bracket and could save $68.75.

"It's not the dollar amount as much as it is the recognition of things that teachers do above and beyond the regular duties of their jobs," Ms. Harter said.

The tax deduction was included in the economic-stimulus package, in part, because it may prompt more purchases, Sen. Collin said. But she also called the stimulus bill "a convenient vehicle" to get the measure to the president.

But Carol Davis, the president of the Louisiana Association of Educators, an NEA affiliate, said she doesn't believe teachers will be prompted by the new deduction to make more classroom purchases with their own money.

To Ms. Roberts, the Tennessee kindergarten teacher, it's a nice boost, but one that other professions don't require.

"It's better than nothing," she said, "but we don't expect doctors to supply their own tools."

Vol. 21, Issue 27, Pages 1, 21

Published in Print: March 20, 2002, as Stimulus Package Offers Tax Break To Help Teachers
Web Resources
  • A March 8, 2002, press release from the National Education Association, applauds the school-supplies tax break for teachers.
  • President Bush has proposed a $400 teacher tax deduction, effective by 2004, in his teacher quality initiative, "A Quality Teacher in Every Classroom: Improving Teacher Quality and Enhancing the Profession."
  • The National School Supply and Equipment Association posts selected findings from their 2001 study on teacher shopping habits.
  • From Education World's November 2001, Voice of Experience column, a veteran educator says that teachers have been buying their own school supplies and working extra hours "for so long that school systems have grown to depend on their generosity."
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