Can union dues be deducted on my tax return?

The Tax Cuts and Jobs Act (TCJA) suspended the deduction for unreimbursed employee expenses, including union dues, for tax years 2018 through 2025. Prior to this change, employees could deduct union dues as a miscellaneous itemized deduction subject to the 2% of adjusted gross income floor, but this is no longer available for W-2 employees.

Who Can Still Deduct Union Dues:

While W-2 employees cannot deduct union dues, there are specific situations where union dues may still be deductible:

Self-Employed Individuals: If you're self-employed and pay union dues as part of your trade or business, you can deduct them as an ordinary and necessary business expense on Schedule C (Form 1040). This applies if you operate as an independent contractor or sole proprietor and the union membership is required for your business operations.

Statutory Employees: Certain workers classified as statutory employees (such as some full-time life insurance salespeople or traveling salespeople) can deduct union dues on Schedule C even though they receive a W-2.

State Tax Considerations:

Some states allow union dues as a deduction on state income tax returns even though they're not deductible federally. For example, California, New York, and several other states have decoupled from the federal TCJA provisions and continue to allow itemized deductions for unreimbursed employee expenses, including union dues. Check your specific state's tax rules, as this varies significantly by jurisdiction.

2026 Updates: 

Permanent Suspension of deductions for unreimbursed employee expenses, including union dues.

Exceptions (Who CAN Deduct)

Self-Employed / Independent Contractors: You can still deduct union or trade association dues as a business expense on Schedule C.

‍Statutory Employees: If your W-2 has the "Statutory Employee" box checked (Box 13), you can still deduct these on Schedule C.

‍Armed Forces Reservists, Qualified Performing Artists, and Fee-Basis Government Officials: These specific groups can still deduct unreimbursed expenses (including dues) as an "adjustment to income" on Schedule 1, meaning you don't even have to itemize to get the benefit.

State Tax Deductions 

New for 2026: Several states passed laws specifically creating new state-level deductions for union dues for workers who are denied the federal deduction.

Ongoing: California, New York, and Pennsylvania continue to allow these deductions on state returns.

Comparison: Union Dues Deduction (2026)

Record Keeping:

Even though union dues aren't currently deductible for most employees, you should still maintain records of your payments. Union dues are typically shown in Box 14 of your Form W-2, and keeping this documentation will be valuable if the deduction becomes available again or if you need it for state tax purposes.

Sources:

• Internal Revenue Code Section 62(a)(2)(A) - Adjusted Gross Income Defined: https://www.law.cornell.edu/uscode/text/26/62
• Internal Revenue Code Section 67(g) - Suspension of Miscellaneous Itemized Deductions (2018-2025): https://www.law.cornell.edu/uscode/text/26/67
• IRS Publication 529 (2024), Miscellaneous Deductions: https://www.irs.gov/pub/irs-pdf/p529.pdf
• Tax Cuts and Jobs Act, Pub. L. 115-97 (December 22, 2017): https://www.congress.gov/115/plaws/publ97/PLAW-115publ97.pdf
• IRS Publication 463 (2024), Travel, Gift, and Car Expenses: https://www.irs.gov/pub/irs-pdf/p463.pdf
• Instructions for Schedule A (Form 1040), Itemized Deductions (2024): https://www.irs.gov/pub/irs-pdf/i1040sca.pdf