What are unreimbursed employee expenses?
They are costs of doing your job that your employer does not pay back, such as tools, work clothes and supplies. The IRS says you can deduct unreimbursed employee expenses only if they are paid for carrying on the trade or business of being an employee, and only if they are ordinary and necessary.
Can an employee deduct them now?
Generally no. Publication 17 says you can no longer claim any miscellaneous itemized deductions that were subject to the 2%-of-AGI limit, including unreimbursed employee expenses, unless you fall into one of the listed categories of employment.
Who can still deduct them?
Publication 17 lists four categories, and those employees complete Form 2106 and take the deduction as an adjustment to income:
- Armed Forces reservists
- Qualified performing artists
- Fee-basis state or local government officials
- Employees with impairment-related work expenses
Who is a qualified performing artist?
Someone who performed services in the performing arts as an employee for at least two employers during the year, received wages of $200 or more from at least two of them, had allowable performing arts expenses of more than 10% of gross income from the performing arts, and had adjusted gross income of $16,000 or less before deducting those expenses.
The IRS examples name musicians and entertainers. The publications we read do not list backstage jobs, so a technician, designer or crew member should ask a tax professional before relying on this category.
What if I am a freelancer instead?
A freelancer deducts business costs on Schedule C instead, under the ordinary and necessary test. The IRS weighs behavioral control, financial control and the type of relationship to decide whether a worker is an employee or a contractor. Our guide 1099 Tax Deductions lists what a contractor can deduct.
Sources: IRS Publication 17 (2025), Your Federal Income Tax, miscellaneous deductions (read October 31, 2026); IRS, Independent contractor (self-employed) or employee? (read October 31, 2026); IRS Publication 334 (2025), Tax Guide for Small Business (read October 30, 2026); IRS, What kind of records should I keep (read October 30, 2026).
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