New Tax Bill Makes Union Dues Fully Deductible, But Other Work Costs Are Only Temporary Itemized Write-Offs

The newly proposed Tax Fairness for Workers Act (TFW Act) is shaking up how employees can write off work-related costs on their federal income taxes, starting with the 2025 tax year. The biggest change is a huge win for union members: all union dues and related expenses will now be fully deductible directly from your gross income. This is called an "above-the-line" deduction, meaning you don't have to itemize your deductions to claim it, simplifying things a lot for those paying dues.

The Union Dues Fast Lane

Under Section 2 of this bill, if you pay union dues, you get the VIP treatment. By making these expenses an "above-the-line" deduction (under Section 62(a)(1) of the Internal Revenue Code), the bill bypasses the usual headaches of itemizing and the dreaded 2% floor. For example, if you make $60,000 and pay $1,000 in union dues, that $1,000 comes right off your taxable income regardless of your other deductions. This is a clear, immediate financial benefit that increases the effective take-home pay for every unionized worker.

The Temporary Return of Employee Expenses

The TFW Act also tries to address other employee business expenses—the costs that every worker incurs, like buying required work uniforms, specialized tools for your job, or mandatory training fees. These deductions were essentially wiped out by the 2017 tax law changes. This bill brings them back, but with a big asterisk and a short expiration date.

For tax years 2025 and 2026 (the bill only pauses the suspension until the end of 2025), you can once again claim these expenses. However, you can only do so if you itemize your deductions on Schedule A. Worse, these expenses are subject to the old 2% floor rule for miscellaneous itemized deductions. This means your total employee business expenses must exceed 2% of your Adjusted Gross Income (AGI) before you can deduct anything. If your AGI is $50,000, you have to spend over $1,000 just on eligible work expenses before you see a single dollar of tax benefit.

A Tale of Two Deductions

This creates a significant disparity in how different workers are treated. If you're a union member, deducting your dues is easy and guaranteed. But if you're a non-union employee—say, a construction worker who buys $800 worth of specialized tools, or a nurse who pays for required certifications—you have to jump through hoops. You must itemize, and if your total expenses don't clear that 2% AGI threshold, you get zero deduction. Furthermore, this benefit for non-union expenses is temporary, sunsetting at the end of 2025, creating uncertainty for employees who rely on these write-offs for their necessary job costs. The bill provides clear, permanent relief for one group of employees while offering only conditional, temporary relief for others.