Union Dues: What's Deductible and What Isn't in 2025

If you’re paying union dues, you might wonder whether these costs can reduce your tax burden. The answer isn’t straightforward—it depends on your employment status and where you live. Since 2018, the federal government has largely eliminated the ability to deduct union dues, but some states still allow it, and self-employed workers have other options.

Understanding Union Dues and Current Tax Rules

Union dues are membership fees that workers pay to labor unions in exchange for collective bargaining, legal support, and other membership benefits. However, not all union-related expenses are treated the same way for tax purposes.

Expenses that typically qualify as deductible union dues:

• Regular membership fees paid to the union
• Initiation or joining fees
• Fees for collective bargaining representation

Expenses that don’t qualify:

• Political contributions or donations to union-sponsored political action committees
• Voluntary strike fund contributions
• Union-sponsored charitable donations
• Health or insurance premiums through the union

The Current Federal Tax Situation

Here’s what changed: The Tax Cuts and Jobs Act of 2017 removed the federal tax deduction for union dues starting in 2018. This suspension applies to most W-2 employees and is currently scheduled to remain in effect through 2025.

Under the old rules, workers could deduct union dues as unreimbursed employee business expenses—but only if these expenses, combined with other miscellaneous itemized deductions, exceeded 2% of their adjusted gross income (AGI). The rationale for eliminating this deduction was to simplify tax filing and help offset other tax reductions.

The one exception: Self-employed individuals can still deduct union dues as a business expense on Schedule C of their tax return, since the IRS permits self-employed workers to claim necessary business-related costs.

State-Level Deductions: Where Rules Differ

While the federal door has closed for most workers, some states maintain their own rules. The ability to claim union dues on state income tax returns varies significantly by location.

States that allow union dues deductions on state returns:

• New York permits itemization of work-related expenses, including union dues
• Pennsylvania recognizes union dues as deductible work expenses

States with no income tax: Texas, Florida, and Nevada don’t collect income taxes, so state-level union dues deductions aren’t applicable.

For most other states, the rules fall somewhere in between. To determine whether your state permits pre-tax deductions for union dues, check your state’s tax department website or consult a tax professional familiar with your local tax code.

What Happens After 2025?

The TCJA provision suspending union dues deductions is set to expire at the end of 2025. This means that unless Congress passes new legislation to extend or modify the suspension, the deduction for miscellaneous itemized deductions—including union dues—could theoretically return in 2026.

However, don’t count on this happening automatically. Tax laws frequently change, and Congress would need to take action to reinstate this deduction. Union members should monitor tax policy updates to stay informed about any changes that could affect their filing status.

Alternative Tax Breaks for Union Workers

Even though union dues aren’t currently federally deductible, union members may qualify for other tax advantages:

• Educator expense deduction: Teachers and qualifying educators can deduct up to $300 per year in work-related classroom expenses
• Self-employment tax benefits: Freelancers and gig workers can deduct business expenses including union dues, travel costs, and home office expenses
• Retirement account contributions: Union members contributing to 401(k)s, IRAs, or similar plans benefit from tax-deferred growth and potential upfront deductions
• Military moving expenses: Active-duty military personnel may still claim job-related moving expenses that other W-2 employees cannot

Taking Action: Next Steps

Since union dues tax treatment varies by employment type and state, the smart move is to review your specific situation. If you’re self-employed, document your union dues carefully—they’re deductible business expenses. If you’re a W-2 employee, investigate whether your state allows these deductions on state returns.

Speaking with a tax professional who understands both your state’s regulations and your employment situation can help you identify all available deductions and minimize your overall tax liability. Whether union dues are deductible or not, there are usually other strategies available to reduce what you owe at tax time.

The bottom line: Union dues are no longer pre-tax deductible at the federal level for W-2 employees through 2025, but self-employed workers can still claim them, and certain states permit state-level deductions. Stay informed about your options.