Can You Deduct Union Dues From Federal Taxes?

From their emergence in the United States during the late 18th century, labor unions have served to counterbalance corporate power by organizing workers collectively. Throughout their history, unions have had some important successes, but have also on occasion been linked to political corruption and organized crime. In the 21st century, union membership is less robust yet still wields clout with business executives and government leaders.

Maintaining this level of influence requires lobbyists, attorneys, financial experts and professional organizers, each of whom gets compensated. Funds for this purpose come from dues paid by individual union members. Sometimes high, these dues take a bite out of the paycheck. Can a member offset this sacrifice at tax time?

In order to accomplish their aims, unions need infrastructure and staff. The former includes office space, furniture, supplies and equipment. The latter encompasses administrators, accountants, lawyers, arbitration specialists, clerical staff and policy analysts, to name a few.

In addition, political action committees must be funded, ironic, since these are fundraising arms, to support candidates who are sympathetic to union goals and values. A large percentage of the remittances go to the local union chapter while the remainder are directed to the various national headquarters.

Spread across all of the active unions in the country, the average dues are about ​$400​ on an annual basis. Thus, the burden it places on individual member households varies depending on salaries and wages.

Still, federal statutes and case law prevent unions from imposing onerous levies on their memberships. This is particularly true in states where union security agreements are in place. Under these regimes, employment is contingent on the acceptance of union membership. So, the state has a vested interest in keeping dues reasonable.

Whether union dues adversely affect household cash flow or not, the question remains: are union dues tax-deductible? The short answer is that dues may not be subtracted from taxable income in the tax years 2018 through 2025. This prohibition was written into the tax reform legislation passed by the U.S. Congress in 2018.

Prior to that year, a union member could write off yearly dues as an unreimbursed employee business expense. Other employee deductions that were stopped include uniform purchases and business-related meals. This legislation sunsets in 2025, so these deductions may or may not return.

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The cost of bringing a claim against an employer for unlawful discrimination is an allowable deduction according to the Internal Revenue Service (IRS). Yet few of the previously permitted unreimbursed employee expenses remain until the 2018 tax law runs out. The only exception to this proscription is for self-employed individuals, none of whom would have to maintain union membership to operate their own businesses.

Year in and year out, simplifying the tax code is an often-touted desire of lawmakers. This sometimes means, unfortunately, people pay more in taxes.

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Unless the provisions of the 2018 Tax Cuts and Jobs Act are extended past 2025, the union dues tax write-off will return in 2026. Future elections will tell the tale. Providing modest tax cuts for individuals in all brackets, the law also eliminated a number of deductions to offset any revenue loss.

The standard deduction for individuals is higher than in 2017, making some itemized deduction losses perhaps more palatable, even more desirable. Still, for those who itemize deductions, the law takes aim at many cherished deductions, union dues among them.