Here’s what HIVE AI had to say about “Are union dues deductible this year?”:

Union Dues Deductibility in 2024

No, union dues are generally not deductible on your federal income tax return this year. The Tax Cuts and Jobs Act (TCJA) suspended the deduction for unreimbursed employee expenses, including union dues, for tax years 2018 through 2025.

Historical Context

Prior to 2018, union dues were deductible as miscellaneous itemized deductions on Schedule A, subject to the 2% of adjusted gross income (AGI) floor. This meant taxpayers could deduct the portion of their total miscellaneous itemized deductions that exceeded 2% of their AGI, provided they itemized rather than taking the standard deduction.

Current Status

Several tax court cases confirm that union dues were previously deductible as unreimbursed employee expenses. For example:

In one tax court case, the court held that the taxpayers incurred unreimbursed employee expenses for union dues of $1,519 and for professional dues and subscriptions of $300, which amounts (together with tax preparation fees of $150) were deductible on Schedule A, subject to the applicable percentage limitations. Dawson U.S. Tax Court Opinions: Irene Jermihov & Peter Jermihov

In another case, the respondent conceded deductions of $1,131 for union dues. Dawson U.S. Tax Court Opinions: Martin J. Luczaj & Alisa M. Luczaj

In yet another case, the court found that a petitioner had substantiated that she paid $229.76 in union dues and was entitled to a deduction in that amount. Dawson U.S. Tax Court Opinions: Shirley Ucol-Cobaria

However, these cases were for tax years prior to the implementation of the TCJA.

How Union Dues Appear on Your W-2

Even though union dues are not currently deductible, they may still appear on your W-2 form:

Box 14 on Form W-2 may be used by employers to report information such as state disability insurance taxes withheld, union dues, uniform payments, health insurance premiums deducted, nontaxable income, educational assistance payments, or a member of the clergy’s parsonage allowance and utilities. IRS – Form W-2: Wage and Tax Statement (Info Copy Only)

This information is provided for your records but does not mean these amounts are deductible on your federal tax return.

Special Cases

There are a few special situations to be aware of:

• Self-employed individuals or independent contractors: If you’re self-employed and pay union dues as part of your business expenses, these may be deductible on Schedule C as ordinary and necessary business expenses.
• Strike fund contributions: The amounts paid by members into a union strike fund are not deductible. IRS IRM 21.6.6 Specific Claims and Other Issues
• Agricultural or horticultural organizations: For taxable years beginning in 2018, the limitation under § 512(d)(1), regarding the exemption of annual dues required to be paid by a member to an agricultural or horticultural organization, is $166. Rev. Proc. 2017 –58

When Will Union Dues Be Deductible Again?

Unless Congress extends the provisions of the TCJA or makes them permanent, the suspension of miscellaneous itemized deductions, including union dues, is scheduled to expire after December 31, 2025. This means that, barring any new legislation, union dues may become deductible again starting with the 2026 tax year.

Recordkeeping

Even though union dues are not currently deductible for federal income tax purposes, it’s still a good practice to keep records of these payments:

• The suspension of this deduction is temporary and may be reinstated in the future
• Some states may still allow deductions for union dues on state income tax returns
• Your union dues documentation may be needed for other purposes

The IRS recommends keeping Copy C of Form W-2 for at least 3 years after the due date for filing your income tax return. IRS – Form W-2: Wage and Tax Statement (Info Copy Only)

Conclusion

For the 2024 tax year, union dues are not deductible on your federal income tax return as unreimbursed employee expenses. This suspension of deductibility continues through the 2025 tax year. Unless Congress takes action to extend these provisions, the deduction for union dues as an unreimbursed employee expense is scheduled to return beginning with the 2026 tax year.

If you’re looking to maximize your tax deductions, focus on other available deductions and credits for which you may qualify, such as the standard deduction, retirement contributions, or education-related deductions and credits.

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