Are Unreimbursed Employee Expenses (Form 2106) Still Allowed After 2017?

The Tax Cuts and Jobs Act (TCJA) of 2017 significantly changed how employees deduct work-related expenses. Before 2018, many workers could claim unreimbursed job expenses using Form 2106. However, these deductions were largely eliminated, except for a few specific groups.

Who Qualifies to Use Form 2106

Form 2106 is now limited to certain employees, including Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, and employees with impairment-related work expenses.

Armed Forces reservists—members of the Army, Navy, Air Force, Marine Corps, and Coast Guard Reserves—can deduct travel expenses if they must travel more than 100 miles from home for reserve duties. This deduction is taken as an adjustment to income, meaning it applies even if the taxpayer does not itemize.

Qualified performing artists, such as actors and musicians, must meet specific income and employment conditions. They must have at least two employers, earn at least $200 from each, and have an adjusted gross income below an inflation-adjusted threshold. Fee-basis state or local government officials, who are paid per service rather than receiving a salary, can also deduct job-related expenses.

Categories of Deductible Expenses

For those eligible to use Form 2106, only specific work-related costs qualify. These must be necessary for job performance and not reimbursed by an employer. The IRS allows deductions in travel, work-related supplies, and uniform or equipment costs.

Travel

Travel expenses are deductible if directly related to work and not reimbursed. This includes transportation, lodging, and meals incurred while performing job duties away from the taxpayer’s regular workplace. For example, an Armed Forces reservist traveling more than 100 miles for training can deduct mileage at the IRS standard rate, which is 67 cents per mile for 2024. Lodging and meals are also deductible, though meals are limited to 50% of the cost.

To qualify, travel must be temporary, meaning the assignment lasts less than one year. If a work location becomes permanent, travel expenses are no longer deductible. Proper documentation, including receipts and mileage logs, is necessary, as the IRS may disallow deductions if records are incomplete.

Work-Related Supplies

Employees eligible for Form 2106 can deduct the cost of supplies necessary for their jobs that are not reimbursed. This includes tools, office materials, and professional reference books. A fee-basis government official who buys legal reference materials for work can deduct the cost, provided the expense is ordinary and necessary for their duties.

The IRS defines “ordinary” as common in the taxpayer’s profession and “necessary” as helpful or appropriate for work. If an item has both personal and business use, only the work-related portion is deductible. Expenses over $2,500 may need to be capitalized and depreciated instead of deducted in full. Keeping receipts and a log of how supplies are used helps substantiate claims.

Uniform and Equipment Costs

Certain employees can deduct the cost of uniforms and job-specific equipment if these items are required for work and not suitable for everyday wear. A qualified performing artist who must purchase costumes for a production can deduct the expense, but a business suit worn for meetings does not qualify.

Protective gear, such as safety boots or helmets, is also deductible. However, if an employer provides a uniform allowance or reimburses these costs, the employee cannot claim the deduction. Cleaning and maintenance costs for required work clothing are also deductible under the same criteria.

Employees should keep receipts and records showing that the uniform or equipment is required for their job. If an item is used for both work and personal purposes, only the work-related portion is deductible. The IRS may disallow claims if the clothing is suitable for general use.

Coordination With Employer Reimbursements

Employers often reimburse job-related expenses, but the tax treatment depends on whether the employer uses an accountable or non-accountable plan.

An accountable plan follows IRS guidelines requiring employees to substantiate expenses with receipts and return any excess reimbursement. Under this structure, reimbursements are not included in taxable income, and employees cannot deduct additional expenses related to the same costs. If an employer reimburses an employee for work-related travel based on actual receipts, the employee cannot claim a deduction.

A non-accountable plan does not require employees to provide detailed expense records or return unused funds. Payments under this type of plan are treated as taxable income, reported on the employee’s W-2, and subject to withholding. In this case, qualifying employees who still have unreimbursed costs may be able to deduct them using Form 2106.

Impact on Itemized Deductions

The TCJA suspended miscellaneous itemized deductions through at least 2025, eliminating the ability for most employees to deduct unreimbursed job expenses. Before 2018, these expenses were deductible if they exceeded 2% of adjusted gross income (AGI) and were claimed on Schedule A.

For those still eligible to use Form 2106, deductions are now considered an adjustment to income, reducing taxable income directly rather than being grouped with other itemized deductions. This benefits taxpayers who do not have enough deductions to exceed the standard deduction, as they can claim the benefit without itemizing.

Some states do not conform to federal tax law changes and still allow unreimbursed employee expenses as itemized deductions on state returns. Taxpayers should review state-specific guidelines to determine whether they can still claim deductions at the state level.

Avoiding Common Reporting Mistakes

Errors in reporting work-related expenses on Form 2106 can lead to deductions being denied or trigger IRS scrutiny. Many mistakes stem from improper documentation, misclassification of expenses, or misunderstanding eligibility requirements.

One frequent error is failing to maintain adequate records. The IRS requires taxpayers to keep receipts, mileage logs, and other supporting documents to substantiate deductions. Without proper documentation, even legitimate expenses may be disallowed.

Another common mistake is attempting to deduct expenses that do not qualify, such as commuting costs or clothing that is not strictly job-specific. Taxpayers should also avoid claiming reimbursed expenses, as doing so results in double-dipping, which may lead to penalties if discovered during an audit.

Misreporting expenses by failing to distinguish between deductible and non-deductible costs is another issue. For example, meals during work-related travel are only 50% deductible, yet some taxpayers mistakenly claim the full amount. Additionally, failing to correctly allocate expenses between personal and business use can lead to overstated deductions. Taxpayers should review IRS guidelines carefully and consult a tax professional if needed to ensure compliance.