What is the 2% rule?
The 2% rule referred to the limitation on certain miscellaneous itemized deductions, which included things like unreimbursed job expenses, tax prep, investment, advisory fees, and safe deposit box rentals.
In 2017 and earlier tax years, wage-earners and other taxpayers who weren’t able to write these off as business expenses were allowed to deduct the portion of these miscellaneous expenses that exceeded 2% of their adjusted gross income (AGI), provided they took the itemized deduction. These miscellaneous expenses were reported on Form 2106.
Under the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017, the deduction for these 2% miscellaneous expenses has been suspended in tax years 2018 through 2025. The "2% rule" is now permanently suspended by the One Big Beautiful Bill Act (OBBBA) signed into law in July 2025.
However, this doesn’t affect:
Self-employed individuals and businesses who can continue to deduct business-related expenses on Schedule C as before
People who work in one of these specific professions or situations:
Armed Forces reservist
Qualified performing artist
Fee-basis state or local government official
You're disabled and have impairment-related expenses
Your job-related expenses may still be allowed on your state return. Enter your expenses and we’ll figure out if you can deduct them.
