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.
The legislation builds on the Governor’s commitment to strengthening and supporting organized labor. In 2015, New York enacted a first-in-the-nation $15 minimum wage, passed the country’s strongest paid family leave program and launched the Joint Enforcement Task Force to protect workers from fraud and abuse. In the last three years, the state has recovered and returned a record-breaking $109 million in unpaid wages to 84,000 workers.
At the same time, New York is in the midst of one of the nation’s most ambitious infrastructure programs in generations. In partnership with local and federal partners, $100 billion is being invested in infrastructure projects across New York to promote economic development, create jobs, and expand opportunity. These investments are enabling New York to rebuild and modernize its roads, bridges, broadband networks, public buildings, and other critical infrastructure across the State while putting thousands of people to work.
