Are Union Dues Tax-Deductible? Rules, Exceptions and What To Know

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Union dues are not tax-deductible on federal returns — unless you’re self-employed. The Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the federal tax deduction for union dues, and it hasn’t returned. However, self-employed workers may still qualify in some states, so it’s worth checking with a financial advisor to see if state-level deductions apply.

Quick Eligibility Snapshot

• Self-employed: Eligible to deduct union dues as a business expense
• W-2 employee: Not eligible for a federal deduction
• State return: Possible deduction under state law
• Claiming the deduction: Requires reporting union dues on Schedule C (Form 1040) and keeping proof of payment

What Are Union Dues?

Union dues are fees that members pay to keep their union running. These funds typically cover the union’s operations, such as negotiations, member support and administrative costs. Union dues are generally 1% to 2% of an employee’s salary, but this amount could change depending on the industry, union and location. 

Are Union Dues Tax-Deductible on Federal Returns?

No, union dues are not tax-deductible on federal tax returns. The one exception is if you’re self-employed. You can deduct union dues as a business expense on Schedule C (Form 1040). 

Who Can Still Deduct Union Dues?

You can deduct union dues in two scenarios:

• If you’re self-employed, you can claim them on your federal tax return.
• Some states allow deductions for union dues on state tax returns. 

Self-Employed Workers

Under the TCJA of 2017, employees could no longer deduct union dues as miscellaneous itemized deductions for tax years 2018 through 2025. As of 2026, Congress has not reinstated the deduction and union dues remain non-deductible for most employees.

The one exception is for self-employed workers, who can deduct union dues as a business expense on Schedule C.

State-Level Deductions

Some states allow for the deduction of union dues on state tax returns, either as itemized deductions or adjustments to income.

Some examples include:

• Maryland
• Delaware
• Hawaii
• Oregon

To see if your state allows it, you can check the National Conference of State Legislatures’ database. 

How To Deduct Union Dues

Before you begin, make sure you have documentation of all union dues paid throughout the year. This information is often included on your paycheck or provided by your union at year’s end.

Federal for Self-Employed Workers

If you’re self-employed, here’s how to deduct union dues on your federal return:

• Step 1: Complete Schedule C as part of your tax return.
• Step 2: In Part II of Schedule C, list union dues under “Other Expenses” or “Dues and Subscriptions,” if applicable.
• Step 3: Report the total amount of union dues paid for the year. 

State Returns

If your state allows deductions for union dues, the process typically involves:

• Step 1: Check if your state tax return includes a section for itemized deductions or unreimbursed employee expenses.
• Step 2: List the total amount of union dues paid on the relevant line of your state tax form.
• Step 3: Attach any additional forms or schedules your state requires to claim these deductions.

Other Tax Breaks Union Members May Qualify For

Although most union members can’t deduct union dues, there are other tax breaks that may still be applicable. 

Pros and Cons of Deducting Union Dues

Before you deduct union dues, it’s worth weighing the potential benefits and drawbacks.

Pros

• Reduces taxable income: Deducting union dues will reduce a taxpayer’s taxable income. 
• Encourages union participation: Having deductible union dues may encourage more individuals to join a union. 
• Offsets membership costs: The deduction can offset the costs of the union’s membership dues. 

Cons

• Doesn’t apply to standard deductions: Most people use the standard deduction, and to get the union dues deducted, you would have to itemize your deductions. 
• More calculations and paperwork: Itemizing your union deduction will add more paperwork and time to your taxes. 

Final Take

• Union dues are not deductible on federal returns for most employees.
• Self-employed workers can still deduct union dues as a business expense on Schedule C.
• Some states allow union dues deductions, but rules vary.
• Although the TCJA provision has expired, Congress has not reinstated the deduction.

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