Are Union Dues Tax Deductible?

Determined by AGI

For union dues and membership initiation fees to be deductible, they have to exceed 2 percent of your adjusted gross income. You can deduct only the amount of union expenses above that threshold. For example, if your AGI is $30,000, the 2 percent threshold is $600. Any dues over that amount are deductible. If your union dues are $1,000, you can deduct $400 off your taxes.

Check the Details

You can’t consider all union expenses when determining what’s eligible for the deduction. The portion that’s earmarked for benefits is tricky -- the Internal Revenue Service allows you to deduct assessments for benefits that go to unemployed union members, but not the portion that provides for sick leave, accident coverage or death benefits. You can’t deduct pension fund contributions, even if the union requires them. You also may not be able to deduct the portion of your dues that covers lobbying or political activities. Your union should provide details about any nondeductible expenses at the end of each year.

Filling Out the Forms

The union-dues deduction is considered as part of line 21 on Schedule A of the 1040 tax form, “Unreimbursed employee expenses -- job travel, union dues, job education, etc.” Schedule A itemizes your deductions. Compare that total to your standard deduction to determine which option is better for you. The standard deduction changes periodically, but is included in each year’s tax forms from the IRS.

Self-Employed

If you’re self-employed, you may be able to get more of a deduction for your union dues. Assuming the dues are required for those in your profession, you can deduct the expense of union dues and initiation fees in full when figuring out how much profit you earned. This situation might occur in professions like acting, where union membership is a condition for many jobs, but the actors themselves generally are treated as independent contractors rather than employees.