UDW Wins Historic Tax Benefit for California Workers

June 30, 2022

United Domestic Workers of America (UDW/AFSCME 3930), a union representing 155,000 home care and family child care workers throughout California, announced today that the budget agreement reached by the governor and legislature includes a major new benefit for working Californians that was achieved through the work of a broad coalition of unions. The Workers Tax Fairness Credit would establish a refundable tax credit for a portion of union dues, allowing workers in low-wage industries who do not itemize or owe taxes to receive the benefits of the tax credit. The credit will be established in statute through a trailer bill in August and activated in a future budget. 

“Tax deductions have generally favored higher income professionals like doctors and lawyers, whose association fees are recognized as a cost of doing business and therefore easily written-off on their taxes. It unfairly privileges high earners over working-class Californians,” said Doug Moore, UDW Executive Director. “UDW fought for the Workers Tax Fairness Credit to level the playing field, because union members deserve these benefits, too.”

UDW and other worker advocates have long sought to bring equity to working-class Californians, and the past few years have made the need for policy like the Workers Tax Fairness Credit even more urgent. Many California union members served as the frontline, essential workers who kept our state running during the pandemic. From home care workers caring for California’s seniors and people with disabilities to custodians keeping schools clean, to transit workers keeping buses and trains moving to get other workers to work, this pandemic has demanded tremendous sacrifice by working people. 

“For workers like me, a tax credit for our union dues could mean hundreds of dollars back in our pockets at tax time,” said UDW president and home care provider, Editha Adams. “Thank you to our elected leaders for championing this initiative. This tax credit will make a huge difference for us, especially with gas prices and the cost of living in California increasing so drastically.”

Unions provide significant public benefits, including expanded access to healthcare and retirement, a narrowing of race and gender wage disparities and racial wealth gaps, and a path out of poverty through job security. Yet workers who belong to unions are unable to enjoy the tax benefits available to the wealthy and well-connected. The Trump Tax Cuts and Jobs Act of 2017 suspended the tax deduction for union dues at the federal level, though employers can still deduct management and legal expenses, and professionals can deduct association dues such as those for the State Bar. While union dues are deductible as an itemized expense on state returns, many workers, including thousands of UDW members, do not earn enough to itemize and therefore cannot deduct them. 

The Workers Tax Fairness credit will complement recent tax policies enacted to benefit low-wage workers and families, including the EITC, the child tax credit and the Golden State stimulus and encourage more workers to file taxes. 

“Unionized workers play a critical role in the economic and social health of our state,” added Moore. “This victory is a testament not only to the value of these workers, but to what unions can accomplish when we come together to fight for what working Californians deserve.”

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