Form 2106

IRS Form 2106: Employee business expenses explained

What is Form 2106 used for?

IRS Form 2106, Employee Business Expenses, lets eligible employees deduct ordinary and necessary job-related expenses that their employer did not reimburse. The form attaches to Form 1040, 1040-SR or 1040-NR and feeds directly into Schedule 1 as an adjustment to income.

Before 2018, most W-2 employees could claim these deductions as miscellaneous itemized deductions. The Tax Cuts and Jobs Act suspended that option for the majority of employees, so Form 2106 now applies only to a specific group of filers.

Who can use Form 2106?

Since 2018, federal tax law has significantly limited who can claim unreimbursed employee business expenses using Form 2106. As a result, only a small group of employees who meet specific IRS requirements remain eligible to use the form. The following four categories of workers may still file Form 2106 at the federal level:

• Armed Forces reservists — members of the National Guard or a reserve component who travel more than 100 miles from home to perform reserve duties
• Qualified performing artists — artists who work for two or more employers, earn at least $200 from each, and whose work-related expenses exceed 10% of gross income from performing
• Fee-basis state or local government officials — public employees compensated entirely or partly on a fee basis rather than a fixed salary
• Employees with impairment-related work expenses — workers with a disability who incur expenses to do their job that are necessary because of their disability

If you fall outside these four categories, Form 2106 does not apply to your federal return. Some states, however, still allow employee expense deductions on state returns, so it is worth checking your state's rules separately.

What expenses can you deduct on Form 2106?

Eligible filers can claim unreimbursed expenses that are ordinary and necessary for their job. The form is organized into two parts: Part I covers general business expenses, and Part II covers vehicle expenses specifically.Common deductible expenses include:

• Vehicle costs — calculated using the IRS standard mileage rate (70 cents per mile in 2025) or the actual expense method, plus parking fees and tolls
• Overnight travel — airfare, trains, hotels, taxis, rideshare, baggage fees, laundry and tips when traveling away from your tax home for business
• Business meals — generally 50% deductible when tied to overnight travel or a clear business purpose
• Other job-related costs — work-related tools, supplies and similar expenses not reimbursed by your employer

Two expenses that are never deductible on Form 2106: commuting between your home and your regular workplace and entertainment costs, which were eliminated as a deduction after 2017.

When did Form 2106 go away for most employees?

Form 2106 did not disappear entirely, but its eligibility narrowed significantly starting with the 2018 tax year. The Tax Cuts and Jobs Act of 2017 eliminated miscellaneous itemized deductions subject to the 2% adjusted gross income floor under section 67(a), which is how most employees previously claimed unreimbursed work expenses.

The current restrictions remain in place through at least 2025. Congress may revisit these rules after the TCJA provisions expire, so eligible filers and those who no longer qualify should monitor any legislative updates that could restore broader access to the deduction.

What information do you need to complete Form 2106?

Accurate recordkeeping is essential before you sit down to fill out the form. Gather the following before you start:

• Your occupation and a description of the expenses being claimed
• Your mileage logs showing the dates, destinations, miles driven and business purpose of each trip
• Your receipts for travel, lodging, meals and other business expenses
• Your records of employer reimbursements received (excluding amounts already included in Box 1 of Form W-2)
• Your vehicle information, including the date it was first placed in service and its percentage of business use
• Your calculations showing the vehicle's business-use percentage if it was used for both personal and business purposes

Where does Form 2106 flow on your tax return?

The deductible amount calculated on line 10 of Form 2106 transfers to Schedule 1 (Form 1040), line 12, as an above-the-line adjustment to income. This means the deduction reduces your adjusted gross income even if you take the standard deduction, which is a meaningful advantage for eligible filers.

Armed Forces reservists have a specific rule: only expenses for travel more than 100 miles from home connected with reserve duty are reported on Schedule 1, line 12. The deduction is also capped at the federal per diem rate for lodging and meals and the standard mileage rate for vehicle expenses.

Need to file Form 2106? The LuminPDF template makes it easy to fill out your employee business expenses accurately and download a clean, IRS-ready copy. Try it today for free.