Tax on Union Benefits

Usually, union benefits are taxable. It is included in gross income on Line 21 of Form 1040, and these are benefits paid to you as an unemployed member of a union out of regular union. In the same line of the form, incomes from benefits received from a union or private fund to which you contribute are also to be included. Incomes received from your employer during periods of unemployment, under a union agreement that gives you full pay during the tax year, are taxable as income and must be reported on your tax return.

Amounts that are deducted from your pay for union dues, assessments, contributions, or other payments to a union cannot be excluded from your salary or wages and hence has to be reported. They should be included in taxable income as wages on your tax return. But, some of these payments can be deducted as miscellaneous itemized tax. Union benefits like cash and the fair market value of other property are included in taxable income on return tax. You can exclude these union benefits from your taxable income on your tax return only when the facts show, and prove that the union gave these benefits as gifts to you.