HR7157-119

What This Bill Does

The Supporting Teachers Through Tax Fairness Act adds new Internal Revenue Code section 139M for K-12 public school teacher wages. An eligible educator may exclude up to $50,000 of wages from gross income for employment as a kindergarten through grade 12 teacher, instructor, counselor, or aide in a public elementary or secondary school, if the individual works at least 900 hours during a school year ending in the taxable year. The limit rises to $65,000 for an eligible educator working at a school where at least 75 percent of students qualify for free or reduced-price lunch, for an eligible educator working in a rural area, or for an eligible educator working as a teacher, instructor, or aide in special education or science, technology, engineering, or mathematics. Public elementary and secondary schools include publicly supervised and publicly funded schools without tuition, including charter schools where State law treats them as such. The Secretary must issue rules, including a process for elementary and secondary schools to provide statements to educators and the Secretary showing eligibility for the 900-hour requirement and the higher-limit categories. The exclusion applies to taxable years beginning after December 31, 2025.

Who Benefits and How

Public K-12 teachers, instructors, counselors, and aides benefit from excluding a large amount of wages from taxable income. Educators in high-poverty schools, rural schools, special education roles, and STEM roles benefit from the higher $65,000 exclusion. Public schools may benefit from a stronger recruitment and retention tool for hard-to-staff classrooms. Charter school educators benefit where their schools meet the public-school definition under State law. Teacher households benefit from lower federal income tax liability after 2025.

Who Bears the Burden and How

Federal revenue collections fall because covered educator wages are excluded from income. The Internal Revenue Service must issue rules, update forms and instructions, process school statements, and audit eligibility. Public elementary schools, public secondary schools, charter schools, and school districts must certify 900-hour service, free-or-reduced-lunch thresholds, rural status, special education or STEM roles, and educator statements. Educators must document eligibility and coordinate with employers when claiming the exclusion. Private school educators and other school workers outside the definition receive no benefit.

Key Provisions

• Creates new Internal Revenue Code section 139M excluding up to $50,000 of eligible public K-12 educator wages.
• Provides a $65,000 exclusion for educators in high-free-lunch schools, rural schools, special education roles, or STEM roles.
• Establishes the eligible educator test through at least 900 hours as a public school teacher, instructor, counselor, or aide.
• Establishes the public elementary or secondary school definition as publicly funded, supervised, and tuition-free under State law.
• Requires Treasury rules and a school statement process to verify educator eligibility.
• Directs the exclusion to apply to taxable years beginning after December 31, 2025.