HB2173, titled the Tools Tax Deduction Act, would change federal income tax rules to let certain employees deduct work-related expenses tied to performing services as an employee. The bill specifically targets construction tools, personal protective clothing and gear, and other necessary expenses connected to the employee’s place of employment. It creates an above-the-line deduction for these expenses, meaning eligible taxpayers could claim the deduction without needing to itemize in the usual way.
The bill also amends the rules governing miscellaneous itemized deductions so that, for employee-related trade or business expenses, the current limitation would not apply in the same manner. In effect, it would reopen a tax benefit for certain unreimbursed employee expenses that have been restricted under current law. The changes would apply to taxable years beginning after December 31, 2025.
Impact
If enacted, the bill would amend sections 62 and 67 of the Internal Revenue Code of 1986 to create a new federal tax deduction framework for specified employee expenses. It would primarily affect workers who incur out-of-pocket costs for tools, protective equipment, and similar job-required items, especially in construction and other hands-on occupations. The bill would also alter how these expenses are treated under the miscellaneous itemized deduction rules, potentially reducing taxable income for eligible employees starting in tax year 2026.
Sentiment
Based on the available record, the bill appears to have a generally supportive framing, as it was introduced with a policy focus on helping workers deduct necessary job expenses. There is no committee transcript or vote history provided, so there is no recorded debate or formal opposition in the materials available. The bill’s introduction and referral to the House Committee on Ways and Means indicate it is still in the early legislative process.
Contention
The main policy issue likely to generate debate is whether employees should again receive tax relief for unreimbursed work expenses, especially after prior tax-law changes limited miscellaneous itemized deductions. Supporters would likely emphasize fairness for workers who must buy their own tools and safety gear, while critics may question the revenue cost, administrative complexity, or whether the deduction should be targeted more narrowly. The bill’s focus on employee expenses rather than broader business deductions may also raise questions about defining eligible costs and preventing abuse.
Individual income tax: deductions; deduction for contributions made to any 529 education savings plan; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30).