ADJUSTED GROSS INCOME DETERMINED BY TAKING INTO ACCOUNT CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY SCHOOL TEACHERS.

SEC. 406. ADJUSTED GROSS INCOME DETERMINED BY TAKING INTO ACCOUNT CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY SCHOOL TEACHERS. (a) In General.—Section 62(a)(2) (relating to certain trade and business deductions of employees) is amended by adding at the end the following: “(D) Certain expenses of elementary and secondary school teachers.—In the case of taxable years beginning during 2002 or 2003, the deductions allowed by section 162 which consist of expenses, not in excess of $250, paid or incurred by an eligible educator in connection with books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment (including related software and services) and other equipment, and supplementary materials used by the eligible educator in the classroom.”. (b) Eligible Educator.—Section 62 is amended by adding at the end the following: “(d) Definition; Special Rules.— “(1) Eligible educator.— “(A) In general.—For purposes of subsection (a)(2)(D), the term ‘eligible educator’ means, with respect to any taxable year, an individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year.116 STAT. 44 “(B) School.—The term ‘school’ means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law. “(1) Coordination with exclusions.—A deduction shall be allowed under subsection (a)(2)(D) for expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135, 529(c)(1), or 530(d)(2) for the taxable year.”. (c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2001.