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Congress·In Committee·10 months ago

Senate RAISE Act Would Offer Teachers Up to $15,000 in Tax Credits, Bar Schools From Cutting Pay

Also known as: RAISE Act of 2025

Legislative Progress

✓ Filed
Review
Senate
House
President

Impacts

Mixed Impacts(1)
Union Member
Neutral

Key Points

  • Creates a refundable teacher tax credit: $1,000 for eligible teachers, with an extra amount for educators in higher-poverty schools.
  • The extra credit can rise up to $14,000 (or $9,000 for some early childhood educators without a bachelor’s degree), depending on school poverty levels.
  • Raises the federal deduction for teachers’ out-of-pocket classroom expenses from $250 to $500 and expands it to cover early childhood educators too.
  • Bars states, school districts, and employers from lowering pay or benefits just because educators can claim this credit, and limits employers from using it in pay negotiations.
  • Sets mandatory federal funding for grants to school districts that maintain or increase teacher salary schedules, starting with $5.2 billion for fiscal year 2026 and increasing with inflation.
TaxesEducationLabor Employment

Milestones

2 milestones2 actions
May 8, 2025Senate

Read twice and referred to the Committee on Finance.

May 8, 2025

Introduced in Senate

What Happens Next

Projected impacts based on AI analysis

Starting with the first taxable year that begins after the bill is enacted (often the next calendar tax year).

Eligible educators can start claiming the new refundable teacher tax credit

Teachers and early childhood educators who qualify could get a larger refund (or owe less) when they file taxes for the first tax year after the bill becomes law.

Applies to expenses paid in taxable years beginning after enactment.

The educator expense deduction increases to $500 and expands to early childhood educators

Educators who buy classroom or learning supplies out of pocket could deduct up to $500 on their federal taxes for the first tax year after enactment, including qualifying early childhood educators who meet the hours rule.

After enactment, during setup for the first filing season where the credit is available.

Education Department begins collecting school/program information for credit amounts

Schools and early childhood programs may have to send poverty/eligibility data so the IRS can verify who qualifies and how much the credit should be.

Before the first tax filing season when the credit can be claimed.

Treasury/IRS issues instructions and forms for claiming the credit

Educators would need to follow new tax form steps and keep any records the IRS requires to prove eligibility (role, certification, school/program).

Likely after the credit starts and agencies are reviewed or audited.

States, districts, and early childhood regulators may be asked to show they didn’t cut pay because of the credit

If Treasury requests it, agencies would need to document that teacher pay/loan-forgiveness funding wasn’t reduced due to the new federal credit.

Beginning in fiscal year 2026 if/when the bill is enacted and funds are released.

Teacher salary incentive grants become available for eligible school districts

Districts that maintained or increased salary schedules could apply for federal grant money to support teacher pipelines, mentoring, credentials, and other retention/quality efforts.

For tax years beginning after 2026 (credit) and for FY2027+ (grant funding).

Credit and grant amounts start rising with inflation adjustments

Over time, the dollar amounts would increase to keep up with rising prices, which helps the credit keep its buying power.

Related News

3 articles
Sen. Cory Booker (official website press release)·10 months ago

Booker, Schiff Reintroduce Bicameral Legislation to Boost Teacher Compensation

Announces the RAISE Act of 2025, describing refundable educator tax credits (min $1,000; up to $15,000), a larger educator expense deduction, Title II funding increases, and grant incentives for higher teacher pay.

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Sen. Cory Booker (official website press release)·10 months ago

Booker Re-Introduces Legislation to Boost Teacher Compensation by up to $15,000

Summarizes key provisions of the RAISE Act: refundable credits up to $15,000, $1,000 baseline credit, labor protections, and doubling the educator deduction to $500; also references mandatory Title II funding levels.

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Sen. Cory Booker (official website press release)·10 months ago

Booker, Schiff, Hayes, Larson, Takano Reintroduce Bicameral Legislation to Boost Teacher Compensation

Bicameral announcement of the RAISE Act with details on educator refundable tax credits, expanded deductions, labor/collective-bargaining protections, and a grant program tied to maintaining or increasing salary schedules.

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Source Information

Document Type

Congressional Bill

Official Title

RAISE Act of 2025

Bill NumberS 1697
Congress119th Congress
ChamberSenate
Latest ActionRead twice and referred to the Committee on Finance.

Sponsor

Cosponsors

(5)
D: 5

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.