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Value-added models (VAMs) have become widely used in evaluating teacher accountability. There is an abundance of research on the impact of various student level covariates on teacher value-added scores; however, less is known about the impact of teacher-level and school-level covariates. This study uses hierarchical linear modeling to examine the impact of including teacher characteristics, school characteristics, and student demographics aggregated at the school level on elementary mathematics and reading teacher value-added scores. The results of this study show that failing to control for aggregated student demographics has a large impact on both teacher level and school level value-added scores. Policymakers and administrators using VAM estimates in high-stakes decision-making should include teacher- and school-level covariates in their VAMs.