Tax Fairness Act Proposes New Above-the-Line Deductions for Union Dues and Employee Expenses Starting 2025

The Tax Fairness for Workers Act aims to change how certain work-related costs are handled on your tax return. Specifically, it proposes allowing employees to deduct union dues and potentially other unreimbursed business expenses directly from their gross income, what's known as an "above-the-line" deduction. This change, outlined by amending Sections 62(a)(1) and 67(g) of the Internal Revenue Code, would kick in for taxable years beginning after December 31, 2024.

Unpacking the Deductions: What "Above-the-Line" Means for You

So, what's the big deal about an "above-the-line" deduction? Currently, many employee business expenses, if deductible at all, fall under miscellaneous itemized deductions. That means you only get a tax benefit if your total itemized deductions exceed the standard deduction amount – something fewer people do after recent tax law changes. This bill shifts union dues and potentially other employee expenses out of that category. By making them deductible directly from your gross income (above the line where Adjusted Gross Income, or AGI, is calculated), you could lower your taxable income regardless of whether you itemize or take the standard deduction. Section 67(g) is specifically amended to lift existing limitations for these employee business expenses, making the deduction more accessible.

Real-World Impact: Who Sees the Savings?

This change directly targets workers who pay union dues. Think of skilled tradespeople, teachers, nurses, or factory workers who are part of a union – under this bill, their dues could reduce their taxable income starting in the 2025 tax year. For example, if a union electrician pays $600 in annual dues, this bill would allow them to subtract that $600 from their gross income before calculating their tax liability. The bill also opens the door for deducting other employee business expenses by removing limitations, though the specifics of which expenses qualify beyond union dues would depend on the final interpretation and IRS guidance. The key takeaway is that for union members and potentially others with specific work costs, this could mean keeping more money in their pockets come tax time, as it directly lowers the income figure their taxes are based on.