Now that the new Congress is fully operational, a federal employee union is restarting calls to establish a tax deduction for workers’ union dues.
Such a benefit may encourage non-union employees to join by mitigating costs of member dues and put money back in workers’ wallets, according to the National Federation of Federal Employees, a union representing approximately 110,000 blue and white collar government workers.
“At a time when high prices and inflation are crushing workers throughout the country, we must find ways to provide them some relief,” said NFFE National President Randy Erwin in a statement. “This tax deduction would put a little more money in workers’ pockets, but it may mean the world when it comes to taking care of their families.”
The provision is part of the Tax Fairness for Workers Act, which was introduced in the last Congress by Sen. Bob Casey (D-Pa.) and received broad support by the union community, as well as the Congressional Labor Caucus. It would amend the Internal Revenue Code to allow an above-the-line deduction for union dues that is subtracted from gross income, effectively adjusting the amount subject to taxes.
The Center for American Progress Action Fund, a public policy institute, recommended similar policy in 2020 following the Trump administration’s 2017 massive tax law that changed tax codes for institutions and included cuts for individual, corporate and estate tax rates. One of the bigger features of the Tax Cuts and Jobs Act was a lower corporate tax rate.
Pro-labor groups took issue with the law for giving too much leniency to businesses and their wealthy owners, and in response, a host of policy ideas rose in response to back up workers.
“In tax policy, there is a well-understood principle that taxpayers should be able to deduct the costs of earning that income,” according to CAP’s a report. “Similarly, the pre-TCJA tax code allowed workers to deduct unreimbursed business expenses, such as union dues and business travel costs, subject to certain limits explained below. However, the TCJA eliminated the deduction for unreimbursed employee expenses.”
With the exception of some employees, like military reservists, most cannot deduct union dues in tax years 2018 through 2025. Prior to 2018, private sector employees may have been able to deduct union dues as unreimbursed employee business expenses, according to H&R Block.
CAP estimated above-the-line federal tax deduction for union dues in 2018 would have reduced revenues by roughly $1 billion — “a relatively modest sum compared to many existing tax expenditures for business.”
“Workers who want to join a union should be able to do so without the cost of union dues affecting their decision,” said NFFE’s Erwin.
NFFE and dozens of other labor groups sent a letter to Congress in December urging Congress to reinstate the deduction in the 2022 lame duck session.
Molly Weisner is a staff reporter for Federal Times where she covers labor, policy and contracting pertaining to the government workforce. She made previous stops at USA Today and McClatchy as a digital producer, and worked at The New York Times as a copy editor. Molly majored in journalism at the University of North Carolina at Chapel Hill.