Do unions file tax returns?
Form 990. IRS Form 990 [PDF] is the tax form used by unions that have $500,000 or more in assets and $200,000 or more in gross receipts for a tax year. The 990 is due every year by the 15th day of the 5th month after the close of the local's fiscal year.
Federal law now requires that every local union file an annual information return—Form 990, 990-EZ, or 990-N—with the IRS. Small tax exempt organizations with local receipts of less than $25,000 are required to file Form 990-N electronically. Form 990-N is also known as the e-Postcard.
For tax years 2018 through 2025, union dues – and all employee expenses – are no longer deductible, even if the employee can itemize deductions. However, if the taxpayer is self-employed and pays union dues, those dues are deductible as a business expense.
Form 990 must be filed by Local Unions with gross receipts of $200,000 or more.
Labor unions under Section 501(c)(5). Business and professional associations under Section 501(c)(6). Social clubs under Section 501(c)(7). Other tax-exempt varieties among more than twenty listed in the Internal Revenue Code.
Current state law already allows taxpayers to deduct their union dues paid as a miscellaneous itemized deduction (subject to the 2 percent limitation).
Audits of local unions and intermediate bodies are conducted under the Compliance Audit Program (CAP). Audits of national and international unions are conducted under International Compliance Audit Program (I-CAP) procedures. Audits are primarily conducted by OLMS investigators.
Unions value seniority, which is good for creating a steady career path, but it can hurt younger workers trying to advance their careers. Seniority also protects workers who consistently under-perform. Con 2: Unions can require dues and fees that some workers might not want to pay.
Other drawbacks of labor union membership include less autonomy, workplace tension, and slower advancement.
Union dues may be deductible from California income taxes if you qualify to itemize on your California tax return. The chart below details Standard Dues Deductions Amounts for 2023 NEA/CTA/TALB dues.
Are unions good or bad?
Labor unions benefit their members by negotiating better pay, benefits, and working conditions. Critics maintain that union contracts make it more difficult for a company to fire unproductive employees, and that they increase long-term costs which decreases competitiveness.
Nonprofit unionization has become increasingly common, but the most prominent organizations whose workers have organized—such as the Southern Poverty Law Center, the American Civil Liberties Union, and the Art Institute of Chicago—are ones with hundreds of employees and that bring in millions of dollars in revenue.
The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a national trade union center that is the largest federation of unions in the United States. It is made up of 60 national and international unions, together representing more than 12 million active and retired workers.
Sojourner and Pacas (2018) find that union membership yields a positive “net fiscal impact”—or, to put it simply, unionized workers have more income and therefore pay more taxes. Unions pave the way for more income and wealth-building for workers and therefore more revenue for the government.
Labor unions, which are found in section 501(c)(5) of the tax code, will generally follow the same rules as 501(c)(4)s when it comes to their advocacy activities.
A labor union is an organization of workers in a trade, industry, or company that is created to represent the workers in negotiations with management over issues of pay, benefits, and working conditions. The labor union representatives negotiate with employers in a process known as collective bargaining.
Box 14 is used to report amounts that don't belong in other boxes on Form W-2. Employers can use it to report additional tax or income information for filing or informational purposes. Some employers use box 14 to report amounts deducted for State Disability Insurance taxes or union dues that may be tax deductible.
Like all other employers, unions must issue W-2 [PDF] forms to their employees by January 31 of each year — notifying them of the amount of their earnings, tax withholdings, and certain benefits for the previous year.
Membership dues can be a confusing part of filing taxes with the IRS. However, a good rule of thumb is that membership dues will be deductible if: Their value exceeds what the member is getting back from the nonprofit. The dues are paid to a valid organization.
The National Labor Relations Act forbids employers from interfering with, restraining, or coercing employees in the exercise of rights relating to organizing, forming, joining or assisting a labor organization for collective bargaining purposes, or from working together to improve terms and conditions of employment, or ...
Who gets audited the most?
The two groups most likely to get audited are those earning more than $10 million and taxpayers who claim the Earned Income Tax Credit, who tend to be low- or middle-income workers.
In fact, the smallest sectors -- natural resources/construction and heavy manufacturing and transport -- are the ones with the highest audit rates. And the sector with the most corporations, financial services, has the lowest audit rates.
The most common reason companies say they oppose labor unions is because they want to have a direct relationship with their employees. It also costs them more money. Research shows that the growth of union jobs correlates to higher wages for the lowest-paid workers.
Critics argue that unions make workplaces less competitive by raising labor costs and making it harder to fire underperformers, that they reduce employment by limiting the labor supply, and that they increase the cost of living by pushing employers to raise prices on goods and services to cover higher labor costs.
Unionized employees earn more than their non-union counterparts. The Bureau of Labor Statistics shows that unionized workers earn more than their non-union counterparts. An organized workforce can negotiate better pay. Employers must also raise the pay of non-union workers to compete for skilled employees.
