Details of Public Law 119-21, section 70110 , One Big Beautiful Bill Act

This provision permanently disallows all miscellaneous itemized deductions that are subject to the two-percent floor that were previously suspended under the Tax Cuts and Jobs Act (Public Law 115-97, section 11045), except itemized deductions for educator expenses. For purposes of the itemized deduction for educator expenses, the provision uses the definition of educator expenses from IRC section 62, without regard to the dollar limitation or language limiting the deduction to nonathletic supplies. The definition is also modified to define “educator expenses” as expenses used as part of instructional activity.

Under this provision, an interscholastic sports administrator or coach is included under the definition of an eligible educator who is eligible to deduct unreimbursed educator expenses.

Under the PITL, California conforms to the federal rules relating to miscellaneous itemized deductions under IRC section 67, as of the specified date of January 1, 2025, with modifications, but specifically does not conform to the federal disallowance of all miscellaneous itemized deductions subject to the two-percent floor. California also does not conform to the allowance of “educator expenses” for purposes of miscellaneous itemized deductions. As a result, California does not conform to the changes made by this provision.

The estimated revenue impact to conform to the above provisions would result in the following gain:

26/27 27/28 28/29 29/30 $1,600,000,000 $1,100,000,000 $1,100,000,000 $1,100,000,000