Employee Business Expense Deduction Reinstatement Act of 2025

Employee Business Expense Deduction Reinstatement Act of 2025 would reintroduce a deduction for unreimbursed employee expenses as a miscellaneous itemized deduction. Specifically, for tax years through 2027, a taxpayer could deduct 85% of unreimbursed food, lodging, travel, or transportation expenses paid or incurred in connection with performing services as an employee, with the overall miscellaneous itemized deductions subject to a 1% of adjusted gross income (AGI) floor (instead of the 2% floor that previously applied). The bill also provides an effective date that treats the change as if it were part of the 2017 Tax Cuts and Jobs Act, and adds a temporary relief allowing potential refunds/credits if the statute of limitations for those credits or refunds runs out within one year of enactment. The sponsor(s) and current status show introduction in the House and referral to Ways and Means. In short, if enacted, more unreimbursed employee expenses in defined categories would become deductible again, albeit only up to 85% of the expense amount and only to the extent they exceed a 1% of AGI floor, and this window runs through 2027.