Improving Child Care Worker Retention through Tax Reform by Including Early Childhood Educators in the Educator Expense Deduction

Including early educators in the Educator Expense Deduction (EED), a federal personal income tax deduction, may be a relatively low-cost way to increase early educator retention by easing a portion of their financial burden and demonstrating that they are respected for the important work they do providing child care to support families and businesses and educating young children.

Early childhood educators often are excluded in policies that support K-12 teachers. One clear example is their exclusion from the EED, which allows teachers and other educational staff to claim up to $300 in federal income tax deductions for their unreimbursed purchases of classroom materials and other necessary educational costs.

This policy brief describes the EED and past efforts to include early educators in this tax deduction, presents new research findings regarding the degree to which early educators might utilize an EED, and offers recommendations for federal and state policy.

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