What this line means
An above-the-line deduction for unreimbursed business expenses available to three specific groups of employees: Armed Forces reservists who travel more than 100 miles from home for reserve duties, qualified performing artists, and fee-basis state or local government officials. These are the only employees who can still deduct unreimbursed employee business expenses after the Tax Cuts and Jobs Act eliminated the deduction for all other employees. Attach Form 2106.
Does this apply to you?
- You are a member of the National Guard or Armed Forces reserve and travel over 100 miles from home for reserve duties
- You are a performing artist who worked for at least two employers, earned $200 or more from each, had business expenses exceeding 10% of gross income from performing, and had AGI of $16,000 or less before this deduction
- You are a state or local government official paid on a fee basis
Easy to overlook
Reservist travel expenses have no distance cap Armed Forces reservists who travel more than 100 miles from home for reserve service can deduct travel expenses (transportation, meals, and lodging) as an above-the-line deduction. 1 Unlike most employee travel, this deduction does not require itemizing and is not subject to the 2% AGI floor. Reservists who drive significant distances for drill weekends often miss this deduction entirely. IRS Publication 463 — Travel, Gift, and Car Expenses
Performing artist qualifications are strict To qualify as a performing artist, you must meet all four conditions: work for at least two employers in the performing arts, earn $200+ from at least two of them, have allowable business expenses exceeding 10% of your performing arts income, and have AGI of $16,000 or less before this deduction. 2 If you miss any one condition, you cannot use line 12 and your expenses are not deductible. IRS Form 2106 Instructions — Employee Business Expenses
Watch out for this
Claiming general employee business expenses on this line. After 2017, unreimbursed employee business expenses are only deductible for these three specific groups. Regular employees — including salespeople, nurses, and office workers — cannot deduct unreimbursed expenses on their federal return regardless of how large the expenses are. Only reservists, qualified performing artists, and fee-basis officials qualify for line 12.
Footnotes
-
IRS Publication 463, Travel, Gift, and Car Expenses, Armed Forces Reservists. https://www.irs.gov/pub/irs-pdf/p463.pdf ↩
-
IRS Form 2106 Instructions, Employee Business Expenses, Qualified Performing Artists. https://www.irs.gov/instructions/i2106 ↩