300 Don Gaspar
Santa Fe, NM 87501-2786
Fax: (505) 827-6520

November 7, 2002
e-mail Public Outreach

Teachers Advised to Save Receipts for Books, Supplies

(Santa Fe, NM)-The New Mexico State Department of Education (SDE) today advised teachers to save their receipts for purchases of books and classroom supplies due to a change in federal tax law. Under the change, eligible educators can deduct up to $250 in qualified expenses paid or incurred in tax years 2002 or 2003.

Eligible educators include teachers, instructors, counselors, principals or aides in both public and private schools in grades K-12 who have worked at least 900 hours in elementary or secondary education during the school year.

The unreimbursed expenses must have been paid or incurred for books, supplies, computer equipment (including related software and services), other equipment and supplementary materials used in the classroom. The deduction is allowed even if the educator does not itemize deductions on Schedule A. Previously, these expenses were deductible only as a miscellaneous itemized deduction subject to the 2% of adjusted gross income limit.

Educators who excluded education savings bond interest or payments from qualified tuition programs, or made tax-free withdrawals from an education savings account, will be able to claim the new deduction only to the extent that their qualified expenses exceed the tax-free amounts.

Details on the change are available in IRS Publication 3991, "Highlights of the Job Creation and Worker Assistance Act of 2002," available on the IRS web site at www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).