Form 2106: Employee Business Expenses

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Form 2106: Employee Business Expenses

What is Form 2106?

Form 2106 (Employee Business Expenses) is an IRS form used to deduct ordinary and necessary job-related expenses that an employer does not reimburse. Since the Tax Cuts and Jobs Act (TCJA) of 2018, most employees can no longer claim unreimbursed employee business expenses. Only a few specific categories of taxpayers remain eligible to use Form 2106.

Key takeaways

  • Form 2106 lets eligible employees deduct unreimbursed, ordinary, and necessary job expenses.
  • Eligible filers (post‑2018) are: Armed Forces reservists, qualified performing artists, fee‑based state or local government officials, and employees with impairment‑related work expenses.
  • Form 2106 has two parts: Part I captures all expenses and reimbursements; Part II addresses vehicle expenses (standard mileage or actual‑cost methods).
  • Commuting costs are not deductible. Interest on car loans is not deductible as a vehicle business expense.

Who can file Form 2106?

The IRS permits only the following taxpayers to use Form 2106:
* Armed Forces reservists
* Qualified performing artists
* Fee‑based state or local government officials
* Employees with impairment‑related work expenses

Before the TCJA (2018), any employee with unreimbursed work expenses could claim them as a miscellaneous itemized deduction; that option was largely eliminated by the TCJA.

What counts as unreimbursed job expenses?

Typical unreimbursed job expenses include:
* Tools and supplies required for the job
* Job‑related education (when it qualifies)
* Work clothing/uniforms required and not suitable for everyday wear
* Home office costs (if qualifying under the rules)
* Insurance required as a condition of employment
* Professional dues and fees

How to file Form 2106

Form 2106 has two main parts:

  1. Part I — All employee business expenses and reimbursements
  2. List business expenses (e.g., parking, tolls, transportation, supplies) and any employer reimbursements.

  3. The form calculates which expenses, if any, are deductible for eligible filers.

  4. Part II — Vehicle expenses
    You can choose one of two methods to report business vehicle use:

  5. Standard mileage rate — multiply business miles driven by the IRS standard mileage rate for the tax year. (For 2025, the standard mileage rate is 70 cents per mile.) This rate is intended to cover fuel, repairs, and wear and tear.
  6. Actual expense method — total actual costs such as gasoline, oil, repairs, insurance, registration, and depreciation (subject to IRS rules and limits). You cannot deduct car loan interest as a vehicle business expense. Whether you use the standard mileage or actual expenses, commuting to and from your regular workplace is not deductible.

Other notes

  • Form 2106‑EZ, a simplified version used prior to 2018, was discontinued after the TCJA changes.
  • Standard deduction context: for 2025, the standard deduction amounts cited are $15,000 for single filers and $30,000 for married couples filing jointly; those changes affect whether itemizing is beneficial.

Conclusion

If you fall into one of the eligible categories (Armed Forces reservist, qualified performing artist, fee‑based government official, or have impairment‑related work expenses), Form 2106 may allow you to deduct unreimbursed ordinary and necessary job expenses. Most other employees cannot claim these deductions since the TCJA of 2018. Always keep detailed records and receipts to support any expenses claimed.