Union dues may be tax deductible depending on whether you’re an employee or an independent contractor.
Are union dues tax deductible for employees?
Employees currently can’t deduct union dues under federal tax law. Some states still allow you to deduct union dues, so check your state’s allowed itemized deductions.
The reason why you can’t claim union dues on taxes is that the Tax Cuts and Jobs Act eliminated deducting unreimbursed employee expenses as an itemized deduction as of 2018.
The good news is that the Tax Cuts and Jobs Act expires after 2025. So union membership dues will be deductible again in 2026 unless Congress votes to permanently eliminate the union dues deduction and other miscellaneous deductions for employee business expenses.
Note: If you’re a fee-based government official that receives a fee for specific services instead of a salary and are subject to self-employment tax, you may be able to deduct union dues. Talk to your tax advisor to confirm your eligibility.
Where are union dues on Form W-2?
Because union dues aren’t tax deductible, you won’t find them on your Form W-2.
If you need to know how much you paid during the year for non-tax reasons, check your pay stubs.
Are union dues before or after tax?
Union dues are deducted after taxes. You don’t get any tax breaks for union dues.
Are union dues subtracted from Adjusted Gross Income?
For employees, you don’t subtract union dues from your Adjusted Gross Income.
Even when union dues were an allowed itemized deduction for unreimbursed employee expenses, they were a below-the-line deduction that didn’t reduce Adjusted Gross Income.
Can you deduct teachers union dues as an educator expense?
Teachers union dues are generally not allowed under the federal Educator Expense Deduction. The deduction is only for specific expenses. (See Tax Topic 458.)
Allowed expenses for the Educator Expense Deduction include professional development courses, books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials that you use in the classroom.
Are union dues tax deductible for independent contractors?
Union dues are generally deductible for independent contractors.
The most common hesitation people have is the broad rule that to claim a business tax deduction, it has to be an ordinary and necessary expense.
Union dues are pretty ordinary, but it’s that necessary part that can sound bad. The IRS uses a much broader meaning of necessary than the plain language definition.
Necessary means anything that is “helpful and appropriate.” In other words, there’s no requirement that you can only deduct union dues when you’re required to be a union member to get a contract.
When are union membership dues not tax deductible?
The IRS no longer allows entertainment expenses as a business tax deduction or as an employee business expense.
You may not be able to deduct your union dues if your “union” is really a social club or a substantial portion of your dues go towards entertainment.
For example, if you’re part of a group that primarily organizes golf outings and happy hours, you probably can’t deduct those membership fees. It doesn’t matter if the group calls itself a union.
If you’re part of a union that provides access to work or professional education, the dues are probably deductible. However, amounts you pay to attend social events generally won’t count as deductible union dues.
Where do I report union dues on my taxes?
Generally, all business expenses for independent contractors go on Schedule C of your Form 1040 Individual Tax Return.
You’ll usually enter union dues in the professional memberships category.
Your union dues will reduce your net business profit. This will reduce both your income tax and your self-employment tax.
You won’t later subtract union dues from your Adjusted Gross Income, since your AGI is calculated from your business profit.
Are other union expenses tax-deductible?
Other union expenses are generally tax-deductible if they further a business purpose. That can include things like:
- Paying to attend a class that furthers your professional education
- Paying for advertising listings or access to jobs
- Purchasing business services through the union
Personal activities, social events, and other forms of entertainment generally won’t be deductible.
