For most workers, union dues are not tax deductible on a federal return. The Tax Cuts and Jobs Act removed the miscellaneous itemized deduction that used to cover them starting in 2018, and the One Big Beautiful Bill Act of 2025 made that removal permanent. A few narrow categories of W-2 employees can still deduct, self-employed workers can write dues off as a business expense, and some states allow the deduction on state returns even though the federal government does not.
Why W-2 Employees Can No Longer Deduct
Before 2018, employees who itemized could deduct union dues as a miscellaneous itemized deduction, subject to a floor of 2% of adjusted gross income. The Tax Cuts and Jobs Act suspended that entire category of deductions. The suspension was originally scheduled to expire after 2025, and many union members expected the deduction to return for the 2026 tax year.
It won’t. The One Big Beautiful Bill Act removed the sunset date from Internal Revenue Code Section 67(g), making the repeal permanent.1Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions If you receive a W-2, union dues, initiation fees, and periodic assessments no longer come off your federal taxable income, and no return date is on the books.
A lot of tax advice online still describes the suspension as “temporary through 2025.” That was accurate when written. It isn’t now. If you’re a salaried or hourly employee getting a W-2, don’t put union dues on your federal return as a miscellaneous itemized deduction.
The Narrow W-2 Exceptions
A handful of employee categories can still deduct unreimbursed business expenses, including union dues, using Form 2106. These survived the TCJA and OBBBA because they’re above-the-line adjustments to income, not miscellaneous itemized deductions.2IRS.gov. 2025 Instructions for Form 2106 – Employee Business Expenses
- Qualified performing artists who worked for at least two employers, whose business expenses exceeded 10% of their performing-arts income, and whose adjusted gross income didn’t exceed $16,000. That threshold hasn’t been adjusted for inflation since 1986, so almost no one qualifies.3Office of the Law Revision Counsel. 26 USC 62 – Adjusted Gross Income Defined
- Armed Forces reservists who travel more than 100 miles from home for reserve duty can deduct unreimbursed travel expenses tied to that service.4Internal Revenue Service. Publication 3 (2025), Armed Forces Tax Guide
- Fee-basis state or local government officials, compensated in whole or in part on a fee basis, can deduct business expenses connected to the role.
- Employees with impairment-related work expenses necessary to perform the job.
If you fall into one of these groups, your dues can go on Form 2106 as part of qualifying employee business expenses. Everyone else on a W-2 is out of options federally.
Self-Employed and 1099 Workers
The permanent suspension doesn’t reach self-employed people. If you receive 1099 income and pay dues to a union, trade association, or professional organization, those payments are deductible as ordinary and necessary business expenses under Internal Revenue Code Section 162. The membership has to be directly connected to your trade or business, not a social group or hobby.
Report the dues on Schedule C. The IRS instructions place professional dues under Part V (Other Expenses) on Line 48, with the total flowing to Line 27b.5Internal Revenue Service. Instructions for Schedule C (Form 1040) (2025) There’s no 2% floor. Every qualifying dollar reduces your business profit, which lowers both your income tax and your self-employment tax.
The two-part test is that the expense must be “ordinary,” meaning common and accepted in your line of work, and “necessary,” meaning helpful and appropriate for your business. Dues to an organization that keeps you connected to clients, credentials, or continuing education clear that bar easily. Dues to a group unrelated to your income-producing work do not.
The Lobbying and Political Portion Never Qualifies
Even when dues are otherwise deductible, the share your union spends on lobbying or political activity is not. Federal law denies a deduction for any amount tied to influencing legislation, supporting or opposing candidates, or swaying public opinion on elections and referendums.6Office of the Law Revision Counsel. 26 USC 162 – Trade or Business Expenses
This matters most for self-employed workers actually claiming dues on Schedule C. If your union spends 15% of its budget on political and lobbying activity, only 85% of your dues counts as a deductible business expense. You need the split. The IRS notification rule under Section 6033(e), which requires certain tax-exempt organizations to tell members what percentage of dues covers non-deductible lobbying, does not apply to labor organizations.7Internal Revenue Service. Nondeductible Lobbying and Political Expenditures Notification and Reporting Requirements of IRC Section 6033(e) Your union isn’t legally required to give you the breakdown, though many do. If yours doesn’t, ask the treasurer for it before you file.
State Returns Are a Different Question
The federal deduction may be gone, but several states still allow union dues as a deduction on state income tax returns. These states have decoupled their tax codes from the federal treatment of miscellaneous itemized deductions. The rules vary: some mirror the old federal setup and require you to itemize, others handle it through their own calculations.
Claiming the deduction on a state return usually means itemizing rather than taking the state standard deduction, so the math only works when your total itemized deductions exceed the state’s standard. Because brackets, thresholds, and eligible expense categories differ by state, actual savings depend on where you live and how much you earn. Check your state tax authority’s website or the instructions for your state’s itemized deduction schedule to see whether unreimbursed employee expenses are still allowed.
What Happens If You Claim It Anyway
Claiming union dues as a miscellaneous itemized deduction on your federal return when you don’t fit one of the narrow exceptions will cause problems. The IRS treats it as an improper deduction. Once the return is processed and the error caught, you’ll owe the tax that should have been paid plus interest. The IRS can also impose an accuracy-related penalty of 20% of the underpayment attributable to negligence or disregard of the rules.8Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty
Most people who make this mistake are following outdated guidance. Tax guides written before the OBBBA passed still describe the suspension as temporary. Some tax software presents a field for miscellaneous itemized deductions without flagging that most filers can’t use it. If your software lets you enter union dues that way and you’re a regular W-2 employee, treat it as a warning rather than an invitation.