The elimination of the deduction for union dues is inconsistent with the notion that there are costs associated with earning income. Just like with the PRO Act , every union member should contact their elected representatives in Washington and urge them to support pro-worker legislation. May 2, Action Alerts. Get More Info. Ensure that workers can reach a first contract quickly after a union is recognized.
Send a Message Now. Recent Articles. Prior to , an employee who paid union dues prior may have been able to deduct them as unreimbursed employee business expenses , if the total of the dues plus certain miscellaneous itemized expenses reached a certain level. The employee then deducted the dues if the employee was able to itemize deductions. Tax reform changed the rules of union due deductions.
For tax years through , union dues — and all employee expenses — are no longer deductible, even if the employee can itemize deductions. However, if the taxpayer is self-employed and pays union dues, those dues are deductible as a business expense. Even workers who normally receive a refund as a result of the earned income tax credit EITC and the child tax credit CTC could benefit from the deduction as long as they had some tax liability before the application of the refundable credits.
Unions and the workers they represent should not have to wait for this eminently fair tax treatment. If an above-the-line deduction for union dues were enacted now on a permanent basis, workers and unions would not be caught up in the decision that Congress will face in —whether or not to allow the law to automatically revert to pre-TCJA law for a range of individual income tax provisions.
An above-the-line union dues deduction could also increase the fairness of state income taxes. Forty-one states and the District of Columbia have an individual income tax. Congress has advanced numerous proposals that would reform labor laws to protect workers going forward.
Federal legislation, such as the Protecting the Right to Organize Act, 28 the Public Service Freedom to Negotiate Act, 29 and the Workplace Democracy Act, 30 include reforms to ensure that more workers are covered by federal collective bargaining laws; protected against employer retaliation or forced attendance at anti-union meetings; and able to bargain with corporations, which have the power to improve workplace conditions.
Lawmakers should advance these policies, as well as reforms to improve the collective bargaining system for workers, by promoting bargaining across industries and instituting policies to ensure that the government is on the side of strong unions and worker organizations. Without a strong collective voice, it is difficult for workers to ensure that they share in the profits they help to generate. Unions are a proven mechanism for workers to stand together and negotiate for the pay and benefits they deserve.
Moreover, because each union can tailor their negotiations to the specific group of workers they represent, union representation may be a more efficient means of addressing sector-specific issues as well as the widespread and persistent problem of stagnant wage growth.
Union dues are an essential expense for workers in their pursuit of fair wages and job security, and all workers should be able to deduct them on their tax returns. Lily Roberts , Galen Hendricks. Annie McGrew , Kate Bahn. Seth Hanlon. Peter Gordon Director, Government Affairs. Madeline Shepherd Director, Government Affairs. The tax law heavily favors corporations over workers The TCJA is tilted in many ways toward the wealthy and corporations. A broadly available union dues deduction is good tax policy Allowing an above-the-line deduction—one that could be taken regardless of whether a worker chooses the standard deduction or itemized deductions—for union dues would increase tax fairness for workers.
Costs of earning income should be deductible A basic principle of income taxation is that taxpayers should be able to deduct the costs of earning their income. Conclusion Without a strong collective voice, it is difficult for workers to ensure that they share in the profits they help to generate. Like most other individual income tax changes in the TCJA, the elimination of the itemized deduction for employee expenses is scheduled to revert to pre-TCJA law in Congress, , p.
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