US SB1697

Creates a refundable tax credit of $1,000 for all eligible educators (elementary, secondary, and early childhood teachers), plus an additional amount up to $14,000 ($9,000 for early childhood educators without a bachelor's degree) for those teaching at qualifying high-poverty schools where student poverty exceeds 39%

Qualifying schools include public elementary and secondary schools eligible for Title I assistance, Bureau of Indian Education schools, and early childhood programs serving children eligible for child care subsidies or the child and adult care food program

Doubles the existing above-the-line deduction for teacher classroom expenses from $250 to $500 and expands eligibility to include early childhood educators working at least 1,020 hours annually

Appropriates $5.2 billion for fiscal year 2026 for ESEA Part A, with annual inflation adjustments, and reserves 20% of funds above $2.2 billion for teacher salary incentive grants to local educational agencies that maintain or increase teacher pay

Prohibits employers from using the tax credit amount in collective bargaining negotiations or changing educator work assignments to prevent or reduce credit eligibility, with enforcement authority granted to the Federal Labor Relations Authority