Union Dues Tax Deductible for NYS, Sort of

On May 5th, 2017, Governor Cuomo signed new legislation that allows union dues to be deducted on the NYS tax return.  This legislation became effective for tax year 2018.  Based on the instructions for form IT-196, NYS has made this deduction very cumbersome.  In order to deduct union dues, the taxpayer will first have to itemize their deductions.  If the taxpayer does not itemize, there is no deduction for union dues.  Even if the taxpayer itemizes their deductions, an additional step/calculation will be required to deduct the full amount of the union dues.

For example, assume a NYS taxpayer has federal adjusted gross income of $100,000 for tax year 2018.  Also assume, the taxpayer has a total of $5,000 un-reimbursed employee expenses which includes $1,300 of union dues paid in 2018.  For the NYS tax return, the taxpayer will first reduce the $5,000 expenses by 2% of federal adjusted gross income.  Now the allowable deduction for un-reimbursed employee expenses is $3,000.  Next to fully deduct the union dues, the taxpayer will need to perform the following calculation:

$3,000/5,000 = .60
1-.60 = .4
$1,300 x .4 = $520
The $520 goes on line 44 of NYS IT-196.  It appears NYS wants this calculation on a separate statement.