Assemblyman Raj Mukherji (D-Hudson), a sponsor of the bill, said it’s a common sense move that "promotes participation in the labor union.” (Dana DiFilippo | New Jersey Monitor)
New Jersey union workers would be able to deduct union dues from their income taxes under a bill introduced last week, nearly six years after a tax cut bill passed by Congress eliminated that option on the federal level.
Assemblyman Raj Mukherji (D-Hudson), a sponsor of the bill, said it’s a common sense move that “promotes participation in the labor union.” Mukherji, who is seeking a state Senate seat in the fall, called unions a hallmark of democracy.
“Dues are essentially an expense related to their employment, but now they’re paying for it personally,” he said. “It’s only reasonable that they’re able to deduct that from their wages.”
Mukerhji’s push on this issue is part of a nationwide trend in states controlled by Democrats. A bill approved in California last year provides up to $400 million in refundable tax credits to reimburse workers for union dues. Maryland’s governor last month signed a law that will allow union members to deduct their dues on state income taxes, and lawmakers in Delaware and Michigan are weighing similar legislation.
Chris Estevez, political and legislative director for Communication Workers of America in New Jersey, which represents more than 10,000 workers statewide in the private and public sectors, said the bill could put more than $1,000 in dues back into union members’ pockets. The CWA is also the largest union representing state workers.
“To be able to deduct that amount from your taxes is significant,” Estevez said. “It’s a cost of doing business, and workers should not be penalized for paying into the union, which is what they need to protect their wages and benefits.”
Workers were previously able to deduct the cost of union dues as an unreimbursed business expense until the Tax Cuts and Jobs Act was signed into law by then-President Donald Trump in 2017. That bill allowed companies to write off legal costs, including those incurred when negotiating with unions, but prohibited workers who aren’t self-employed from deducting union dues from their income taxes.
A bill has been introduced in the U.S. Senate to restore the deduction of some work expenses and union dues.
According to the Bureau of Labor Statistics, nearly 15% of New Jersey’s workforce belonged to a union in 2022. A Rutgers University report found New Jersey has a higher unionization rate than most other states, and that Black workers are most likely to be union members.
Dues vary between industries and markets but are typically a small percentage of someone’s pay.
If signed by Gov. Phil Murphy, New Jersey’s bill would go into effect immediately and apply to the following taxable year.
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