Employee Business Expense Deduction Reinstatement Act of 2025

This bill amends the Internal Revenue Code to allow employees to deduct certain unreimbursed business expenses as miscellaneous itemized deductions, overriding a temporary suspension of such deductions through 2025. It modifies the rules for tax years through 2027, with a special exception for food, lodging, travel, and transportation expenses, and provides a one-year extension for filing refund claims related to these changes.

Sec. 2, Unreimbursed employee expenses taken into account as miscellaneous itemized deduction: This section amends Internal Revenue Code Section 67(g) to extend the suspension of miscellaneous itemized deductions through 2027, but creates an exception for unreimbursed food, lodging, travel, or transportation expenses paid by an employee. For these expenses, an individual may deduct 85% of such costs, and the usual 2% floor on miscellaneous deductions is reduced to 1%. The change is effective as if included in the Tax Cuts and Jobs Act, and taxpayers have one year from the bill's enactment to file claims for refunds or credits for overpayments resulting from this amendment.