Where Do Union Dues Go on a Tax Return?

Union dues often represent a regular deduction from an individual’s paycheck, prompting many to wonder about their tax implications. Understanding how these dues interact with tax laws can be complex, especially since relevant regulations have undergone significant changes in recent years. Navigating the rules surrounding tax deductibility requires careful attention to specific criteria and filing procedures.

Current Deductibility of Union Dues

For most employees, union dues are not deductible on federal income tax returns for tax years 2018 through 2025. The Tax Cuts and Jobs Act (TCJA) of 2017 suspended miscellaneous itemized deductions that were previously subject to a 2% adjusted gross income (AGI) limitation. Union dues were typically included in this category before the legislative change.

During this period, most wage-earning taxpayers cannot claim a deduction for their unreimbursed employee business expenses, which include union dues. The law is set to revert to its prior form after December 31, 2025, unless Congress enacts further legislation.

Exceptions to the General Rule

While union dues are generally not deductible for most employees, certain specific categories of taxpayers may still deduct these expenses. These exceptions apply to individuals in particular professions or with specific circumstances.

One exception applies to qualified performing artists. To meet this classification, an individual must perform services in the performing arts as an employee for at least two employers during the tax year, with each employer paying at least $200 in wages. Additionally, their allowable business expenses attributable to the performing arts must exceed 10% of their gross income from such activities, and their adjusted gross income must be $16,000 or less before deducting these expenses.

Another exception covers fee-basis state or local government officials. These are individuals employed by a state or political subdivision who are compensated on a fee basis, typically receiving remuneration directly from the public for their services, distinguishing them from salaried government employees. Lastly, employees with impairment-related work expenses may also deduct union dues if these expenses are necessary for them to perform their job duties due to a physical or mental disability. These expenses must not be required or used, other than incidentally, in the employee’s personal life.

Reporting Deductible Dues

For taxpayers who fall into one of the qualifying exception categories, reporting deductible union dues involves specific tax forms. The initial step requires completing Form 2106, Employee Business Expenses, to calculate the total amount of eligible unreimbursed expenses. This form helps calculate eligible job-related costs, including union dues.

Once the deductible amount is determined on Form 2106, the method of reporting it on the main tax return varies depending on the taxpayer’s exception. Qualified performing artists and fee-basis state or local government officials report their calculated deductions on Schedule 1 (Form 1040), line 12. This is considered an “above-the-line” deduction, meaning it reduces their adjusted gross income and can be claimed whether they take the standard deduction or itemize. Conversely, employees with impairment-related work expenses report their deduction on Schedule A (Form 1040), Itemized Deductions, specifically on line 16. This means they must choose to itemize their deductions rather than taking the standard deduction to benefit from this write-off.

Maintaining Records

Regardless of whether union dues are currently deductible for an individual, maintaining thorough records related to these payments is a prudent financial practice. Comprehensive documentation provides a clear history of payments, invaluable for personal financial tracking, budgeting, and understanding overall spending on employment-related costs.

Keeping detailed records becomes especially important if a taxpayer believes they qualify for an exception, or if tax laws change in the future to allow broader deductibility. Relevant documents to retain include pay stubs showing union dues deductions, union statements, and personal bank or credit card statements. These records serve as essential evidence in the event of a tax inquiry or audit, demonstrating the nature and amount of expenses incurred.