Preschool Teachers Gain New Tax Deduction for Classroom Supplies

The Supporting Early-Childhood Educators’ Deductions Act (SEED Act) now lets preschool teachers claim a $350 tax deduction for classroom supplies in the 2026 tax year, matching a benefit K-12 teachers have enjoyed since 2002.

Eligibility and scope

The provision was added to the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 and signed into law on Sept. 18. It defines an early-childhood educator as anyone employed at a facility that cares for more than two children under six, excluding children who live on site, and that receives fees or public funding such as Head Start programs.

To qualify, teachers must purchase supplies themselves and can deduct up to the $350 limit on their federal return. The deduction applies regardless of whether the center is private or publicly funded, as long as it meets the enrollment and funding criteria.

Reactions from the field

Research shows early-education staff earn a median wage of about $13 an hour, roughly half the pay of K-8 teachers. A survey found that 91 percent of early educators spend their own money on classroom materials, with home-based providers averaging nearly $300 in unreimbursed expenses each year.

Educators earning under $35,000 annually report spending about $200 of personal funds on supplies. The new deduction therefore targets a sizable out-of-pocket cost that has long gone unreimbursed.

Walter Gilliam, executive director of the Buffett Early Childhood Institute, said, “If we’re going to pay them that terribly, the least we can do is not tax them on their terrible pay.” His comment highlights the longstanding pay gap between preschool and K-12 staff.

Sarah Rittling, executive director of the First Five Years Fund, noted that congressional approval of the credit signals growing legislative attention to early-childhood issues as elections approach.

At Bluff’s Little Thinkers in western Iowa, director Kelsey Andersen runs a center serving 72 children across five classrooms. Staff regularly purchase rugs, specialty lighting and sensory items out of pocket, often exhausting limited center budgets before the school year ends.

Andersen said the deduction won’t transform salaries, but it “signals a larger, much delayed level of respect for early childhood teachers.”