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SALT TALK:  New York State Budget Makes Taxpayers Proud to be a Union Man (or Woman)

Wayne Berkowitz CPA, J.D., LL.M. 05.01.2017 | SALT TALK

Due to the serious nature of the New York State budget negotiations (rumor has it the legislation and the negotiations were referred to as “The Big Ugly”) I haven’t had a good musical reference in weeks. Well, now that it is over and done with, I can come right out and say “Live music is better.  Bumper stickers should be issued.” For those of you familiar with the Neil Young tune, “Union Man,” Mr. Young can be heard uttering this phrase during a supposed meeting of his Musicians’ Local.

What we didn’t hear Mr. Young say but was enacted into law some 37 years after his original bumper sticker request[1], is that union dues should be fully deductible, at least in New York State. Under federal law, union dues are a miscellaneous itemized deduction, subject to 2% of adjusted gross income limitation. So for federal tax, often no or a limited deduction “will be issued.” New York will now give taxpayers the entire itemized deduction, however large or small it may be.

While I’m certainly glad to see the working man (or woman) get a break, I find this change particularly interesting as it was not presented in the Governor’s original proposal. The revenue impact I would imagine is minimal and you wouldn’t think a Democratic governor (or even a Republican one) would be at all reluctant to get organized labor’s support. I could just imagine where, why, when and how this snuck in during the “Big Ugly” budget process of 2017. I won’t likely be seeing you at the next meeting of the A F or M or any other union meeting for that matter (CPA firm partners have a difficult time organizing) so take this as your last reminder to deduct all of your dues in New York.

If you have questions, contact me at WBerkowitz@BerdonLLP.com or your Berdon advisor.

Wayne Berkowitz, a tax partner and head of the State and Local Tax Group at Berdon LLP, advises on the unique requirements of governments and municipalities across the nation.

[1] “Union Man” is the third track on side 2 (7th track on the CD  or digital download for those of you not familiar with albums) of Mr. Young’s tenth studio album, “Hawks & Doves”.

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