Income and Assets · Adjustments to Income

Other adjustments to income

This group has shrunk, and 2026 changes it again. Alimony has been outside the Code since 2018 for instruments executed after that year. Moving expenses survive only for members of the Armed Forces — and, for the first time in 2026, for certain intelligence community personnel, a category Pub. L. 119-21 added while making the suspension of everything else permanent. What remains is a short list, and the errors on it are almost all about counting: one cap per return, not per loan or per student.

The rule

Student loan interest. A deduction is allowed for the interest paid during the taxable year on any qualified education loan (IRC § 221(a)), capped at a fixed amount (§ 221(b)(1)) given in the table below. The cap is a single figure for the return; nothing in the section multiplies it by loans, by students, or by dependents.

And it phases out on modified adjusted gross income. The amount otherwise allowable is reduced by a ratio of the excess of modified adjusted gross income over a threshold to a fixed range (IRC § 221(b)(2)(A), (B)), with both figures adjusted annually.

Alimony is not an adjustment at all. IRC § 215 was repealed by Pub. L. 115-97 § 11051(a). For an instrument executed after 31 December 2018 — or executed earlier and modified after that date to adopt the change — alimony is neither deductible by the payer nor includible by the recipient. The old regime continues for pre-2019 instruments that have not been so modified, which is why both rules are still live in practice.

Moving expenses are suspended, with two exceptions. Except in the case of an individual to whom subsection (g) applies, § 217 does not apply to any taxable year beginning after 31 December 2017 (IRC § 217(k)(1)). Subsection (g) covers a member of the Armed Forces on active duty who moves pursuant to a military order and incident to a permanent change of station. Section 217(k)(2), added by Pub. L. 119-21 § 70113(b), extends the same treatment to an employee or new appointee of the intelligence community, other than a member of the Armed Forces, who moves pursuant to a change in assignment requiring relocation.

Educator expenses. The deductions allowed by § 162 consisting of expenses of an eligible educator, up to an indexed ceiling, for participation in professional development courses related to the curriculum or students, and for books, supplies — other than nonathletic supplies for health or physical education courses — computer and other equipment, and supplementary materials used in the classroom (IRC § 62(a)(2)(D)(i), (ii)).

And who counts as one. A kindergarten through grade 12 teacher, instructor, counselor, principal or aide in a school for at least 900 hours during a school year (IRC § 62(d)(1)(A)), a school being one providing elementary or secondary education as determined under State law (§ 62(d)(1)(B)). A college instructor is outside the definition however similar the expense.

Reservist travel. Expenses of a member of a reserve component of the Armed Forces, at a rate not exceeding the Federal travel rates, for any period during which the individual is more than 100 miles from home in connection with those services (IRC § 62(a)(2)(E)).

And the general gateway. Deductions attributable to a trade or business not consisting of the performance of services as an employee are taken in computing adjusted gross income (IRC § 62(a)(1)) — the provision that puts the self-employment tax deduction, the self-employed health insurance deduction and self-employed retirement contributions above the line.

Current figures

How it works in practice

For student loan interest, the only real work is the phase-out and the identification of a qualified education loan — the cap itself is a single number and does not scale. Note that the interest must be paid by the taxpayer on a loan for which they are legally obliged; a parent paying a child’s loan on which the parent is not liable gets nothing, and the child, if claimed as a dependent, gets nothing either.

For alimony, ask for the instrument and its date before anything else. A pre-2019 decree keeps the old treatment indefinitely — the payer deducts, the recipient includes — unless the parties have modified it after 2018 and expressly adopted the new rules. Two divorced households can therefore be on opposite regimes in the same filing season, and neither is wrong.

For moving expenses, read for the two conditions in § 217(g): active duty and a military order incident to a permanent change of station. A service member moving for personal reasons is inside the suspension like everyone else. From 2026, check whether the taxpayer is instead within § 217(k)(2) — the intelligence community route is new and reaches new appointees as well as existing employees.

For educator expenses, count hours and check the grade level. The 900-hour test in § 62(d)(1)(A) is per school year, and the definition is a closed list of roles — a coach who is also a teacher qualifies through the teaching role, not through coaching.

How this has changed

Pub. L. 119-21 made the moving expense suspension permanent and simultaneously widened its exception. Section 70113(a) substituted “beginning after 2017” for “2018 through 2025” in the heading of § 217(k) and struck ”, and before January 1, 2026” from the text; § 70113(b) then designated the existing rule as paragraph (1) and added paragraph (2) for the intelligence community. Both changes apply to taxable years beginning after 31 December 2025. Material written before July 2025 correctly describes a suspension due to lapse — it will not — and describes only one exception where there are now two.

The alimony repeal was prospective and remains so. Pub. L. 115-97 § 11051(a) repealed § 215 outright rather than suspending it, and the effective date provisions confine the change to instruments executed after 2018 and to earlier instruments modified after that date to adopt it. Nearly a decade on, both regimes are still in use, and the deciding fact is the date on the paper rather than anything about the payments.

The educator deduction became indexed in 2020 and has moved more than once since; it is set annually by the Revenue Procedure rather than fixed in the Code, and § 62(a)(2)(D) still carries its original unindexed figure in the statutory text.

What has not changed is the shape of § 62(a)(1), and it is worth noticing what it does: several of the most valuable adjustments on an individual return are not listed separately anywhere but arrive through that single paragraph, as deductions attributable to a trade or business.

Exam focus

Expect the student loan cap with multiple loans or students in the facts, testing whether it scales. It does not.

Expect an alimony question with a decree date. That date decides the answer.

Expect a moving expense question with a service member, testing both conditions — and, from 2026, possibly the intelligence community exception.

Expect an educator question with a college instructor among the options, which is outside the definition.

Check yourself

1. A taxpayer pays 4,800 dollars of interest across three qualified education loans. Income is below the phase-out. What is deductible?

Answer: The statutory maximum of 2,500 dollars. IRC § 221(b)(1) caps the deduction for the taxable year at a single amount regardless of the number of loans.

2. A payer under a 2015 divorce decree, never modified, pays alimony in 2026. Is it deductible?

Answer: Yes. IRC § 215 was repealed prospectively by Pub. L. 115-97 § 11051(a), so an instrument executed before 2019 and not modified after 2018 to adopt the change keeps the former treatment — the payer deducts and the recipient includes.

3. A member of the Armed Forces moves at their own expense for personal reasons. May moving expenses be deducted?

Answer: No. IRC § 217(g) requires a move pursuant to a military order and incident to a permanent change of station; without both, § 217(k)(1) leaves the individual inside the suspension.

4. A university lecturer spends 400 dollars on classroom supplies. Is any of it an adjustment to income?

Answer: No. IRC § 62(d)(1)(A) confines an eligible educator to a kindergarten through grade 12 teacher, instructor, counselor, principal or aide, so higher education is outside the provision.

5. What is new for 2026 in this group?

Answer: IRC § 217(k)(2), added by Pub. L. 119-21 § 70113(b) and applicable to taxable years beginning after 31 December 2025, treats an employee or new appointee of the intelligence community who relocates on a change of assignment in the same manner as a member of the Armed Forces within § 217(g). The same Act also removed the suspension’s end date.