The Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the federal tax deduction for union dues from 2018 through 2025. However, certain states, such as New York, allow union members to deduct these dues on their state income tax returns. Union members should consult a tax professional to understand their specific state laws so that they can maximize any available deductions.
A financial advisor who specializes in tax planning can help you create a financial plan with the goal of lowering your tax liability.
Union Dues Basics
Union dues are fees that members pay to labor unions to support collective bargaining, legal representation and other union-provided benefits. Here are some two general examples of what does and does not qualify as a union due:
- Qualifying union dues include regular membership dues paid to a union, initiation fees for joining a union and fees paid for collective bargaining representation.
- Non-deductible union expenses include political contributions or payments to union-sponsored political action committees (PACs), voluntary contributions to strike funds or union-sponsored charities and union insurance premiums.
Are Union Dues Tax-Deductible in 2025?
As of now, union dues are not tax-deductible on federal income tax returns-unless the taxpayer is self-employed.
The Tax Cuts and Jobs Act (TCJA) eliminated the ability for W-2 employees to deduct union dues as unreimbursed business expenses. This change means that unless Congress extends or modifies the law, union members will not be able to deduct these expenses when filing their 2025 taxes.
Union dues were previously deductible under the category of unreimbursed employee expenses, which allowed workers to deduct certain job-related costs that exceeded 2% of their adjusted gross income (AGI). When the TCJA was enacted, it temporarily eliminated this category of deductions for W-2 employees. The rationale behind this change was to simplify tax filing and offset the cost of other tax cuts.
Self-employed individuals, however, are still eligible to deduct union dues as a business expense on Schedule C of their tax return, since the IRS allows self-employed workers to claim necessary business-related costs.
Will Union Dues Be Tax-Deductible After 2025?
The TCJA's provision that suspended the deduction for union dues is set to expire at the end of 2025. Unless new legislation is passed to extend the suspension, the deduction for miscellaneous itemized deductions-including union dues-could return in 2026.
However, tax laws are subject to change. Union members should stay informed about updates that may impact their filing status.
How to Determine If Your State Considers Union Dues Tax-Deductible
While federal tax law no longer allows most workers to deduct union dues, some states still permit this deduction on state income tax returns. The ability to claim union dues at the state level depends on local tax laws, and eligibility varies by location.
A few states maintain their own tax codes that still recognize union dues as deductible expenses. Examples include New York and Pennsylvania, where taxpayers can itemize deductions for work-related expenses.
Meanwhile, in states like Texas, Florida and Nevada, income taxes are not collected. As such, union dues deductions are not applicable at the state level.
Union members should consult their state's tax department website or a tax professional to determine whether they qualify for a deduction at the state level.
Other Tax Deductions and Considerations
Even though union dues are not currently deductible on federal tax returns, union workers may still be eligible for other deductions and tax credits. Here are common common ones to keep in mind:
- Educator expenses deduction: Teachers and eligible educators can deduct up to $300 per year in work-related expenses.
- Self-employment deductions: Independent contractors and gig workers can deduct business-related expenses, including union dues, travel and home office costs.
- Retirement contributions: Union members who contribute to tax-advantaged retirement accounts, such as a 401(k) or IRA, can benefit from tax-deferred growth and potential deductions.
- Job-related moving expenses: While most moving expenses are no longer deductible for W-2 employees, active-duty military members may still claim this deduction.
Bottom Line
The Tax Cuts and Jobs Act of 2017 suspended the federal tax deduction for union dues from 2018 through 2025. Currently, only self-employed individuals can deduct union dues as a business expense on their Schedule C tax return. However, certain states, such as New York, allow union members to deduct these dues on their state income tax returns.
Tax Planning Tips
- Whether you are a union member or not, a financial advisor who specializes in tax planning can help you understand specific state laws for your liability and maximize any available deductions. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
- If you want to know how much your next tax refund or balance could be, SmartAsset's tax return calculator can help you get an estimate.
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