Governor Andrew M. Cuomo today signed new legislation allowing full union dues to be deducted from New York State taxes. The FY 2018 Enacted Budget creates a union dues deduction for New York taxpayers who itemize deductions at the state level equal to the amount currently disallowed at the federal level due to the 2 percent floor. The deduction is expected to save 500,000 hardworking men and women $35 million annually or about $70 per taxpayer per year.
“At a time when unions are under attack on the national level, New York is fighting even harder to preserve union jobs and uplift the middle class,” Governor Cuomo said. “By allowing full deduction of union dues, we are providing more than just a financial benefit, but also a strong demonstration of our unyielding commitment to defending union jobs as a pathway to the middle class.”
Currently, New Yorkers paying state and local taxes who make charitable contributions and pay mortgage interest are likely to claim itemized deductions on their federal tax returns. Many who itemize for federal purposes, may also itemize on their New York State tax returns.
An additional, but less frequently used deduction, applies for a group of miscellaneous expenses, such as union dues, professional society dues, the cost of work clothes, tax preparation, and out-of-pocket job expenses. A floor applies in which only amounts in excess of 2 percent of taxpayers’ adjusted gross income (AGI) are deductible. The floor, therefore, likely prevents deductibility of a significant portion of union dues at the federal level, and in turn fails to lower the “top line” starting point for the taxpayer’s New York return, i.e. Federal taxable income.
The FY 2018 Enacted Budget rectifies this inequity and creates a full union dues deduction for New York taxpayers. The new deduction applies both to New Yorkers who currently receive a deduction for only a portion of their union dues, or those in excess of 2 percent of their income, along with those who currently receive no deduction because their total miscellaneous deductions fall below the 2 percent established federal floor.
The new measure is expected to save approximately 500,000 New York taxpayers $35 million annually, or $70 on average per taxpayer per year.
