What This Bill Does
This bill changes tax rules for workers. It lets workers deduct union dues and expenses directly from their income before calculating taxes. It also lets workers deduct other unreimbursed work expenses the same way.
Who It Affects
Workers and employees who pay union dues or have unreimbursed work expenses.
Key Provisions
• Workers can deduct union dues and expenses from their income before taxes are calculated (Sec. 2(a))
• Workers can deduct unreimbursed expenses related to their job as a miscellaneous itemized deduction (a type of tax deduction that lowers taxable income) (Sec. 2(b))
• When applying the 2-percent test (a rule that limits how much workers can deduct for miscellaneous expenses), only the unreimbursed employee work expenses count toward that limit (Sec. 2(b)(2))
What Changes
If this becomes law, workers would be able to deduct union dues and unreimbursed work expenses directly from their income. This could lower the amount of income they owe taxes on.
Important Definitions
None defined in bill text.
Effective Date
Taxable years beginning after December 31, 2022 (Sec. 2(c))
II
118TH CONGRESS
1ST SESSION
S. 738
To amend the Internal Revenue Code of 1986 to allow workers an above-
the-line deduction for union dues and expenses and to allow a miscella-
neous itemized deduction for workers for all unreimbursed expenses in-
curred in the trade or business of being an employee.
IN THE SENATE OF THE UNITED STATES
MARCH 9, 2023
Mr. CASEY (for himself, Mr. SCHUMER, Mrs. MURRAY, Mr. BROWN, Mr.
SANDERS, Ms. BALDWIN, Mr. BENNET, Mr. BLUMENTHAL, Ms. CANT-
WELL, Mr. CARDIN, Ms. CORTEZ MASTO, Ms. DUCKWORTH, Mr. DURBIN,
Mrs. FEINSTEIN, Mr. FETTERMAN, Mrs. GILLIBRAND, Ms. HASSAN, Mr.
HEINRICH, Ms. HIRONO, Mr. KELLY, Mr. KING, Ms. KLOBUCHAR, Mr.
LUJA´N, Mr. MARKEY, Mr. MENENDEZ, Mr. MERKLEY, Mr. MURPHY, Mr.
PADILLA, Mr. REED, Ms. ROSEN, Mr. SCHATZ, Mrs. SHAHEEN, Ms.
SMITH, Ms. STABENOW, Mr. VAN HOLLEN, Mr. WARNOCK, Ms. WAR-
REN, Mr. WELCH, Mr. WHITEHOUSE, and Mr. WYDEN) introduced the
following bill; which was read twice and referred to the Committee on Fi-
nance
A BILL
To amend the Internal Revenue Code of 1986 to allow work-
ers an above-the-line deduction for union dues and ex-
penses and to allow a miscellaneous itemized deduction
for workers for all unreimbursed expenses incurred in
the trade or business of being an employee.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
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•S 738 IS
SECTION 1. SHORT TITLE.
1
This Act may be cited as the ‘‘Tax Fairness for
2
Workers Act’’.
3
SEC. 2. ALLOWANCE OF DEDUCTION FOR CERTAIN EX-
4
PENSES OF THE TRADE OR BUSINESS OF
5
BEING AN EMPLOYEE.
6
(a) ABOVE-THE-LINE DEDUCTION FOR UNION DUES
7
AND EXPENSES.—Section 62(a)(1) of the Internal Rev-
8
enue Code of 1986 is amended by adding at the end the
9
following new sentence: ‘‘The limitation under the pre-
10
ceding sentence shall not apply to deductions which are
11
attributable to a trade or business consisting of the per-
12
formance of services by the taxpayer as an employee if
13
such deductions are for union dues and expenses.’’
14
(b) ALLOWANCE OF MISCELLANEOUS ITEMIZED DE-
15
DUCTION
FOR OTHER EXPENSES
OF
THE TRADE
OR
16
BUSINESS OF BEING AN EMPLOYEE.—Section 67(g) of
17
the Internal Revenue Code of 1986 is amended—
18
(1) by striking ‘‘2025.—Notwithstanding sub-
19
section (a),’’ and inserting ‘‘2025.—
20
‘‘(1) IN GENERAL.—Notwithstanding subsection
21
(a), except as provided in paragraph (2),’’; and
22
(2) by adding at the end the following:
23
‘‘(2) EXCEPTION
FOR
EXPENSES
OF
THE
24
TRADE OR BUSINESS OF BEING AN EMPLOYEE.—
25
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•S 738 IS
‘‘(A) IN
GENERAL.—Paragraph (1) shall
1
not apply to miscellaneous itemized deductions
2
for any taxable year which are itemized deduc-
3
tions attributable to a trade or business carried
4
on by the taxpayer which consists of the per-
5
formance of services by the taxpayer as an em-
6
ployee.
7
‘‘(B) APPLICATION OF 2-PERCENT TEST.—
8
In applying subsection (a) for any taxable year
9
to which this paragraph applies, only the
10
itemized deductions described in subparagraph
11
(A) shall be taken into account as miscellaneous
12
itemized deductions.’’.
13
(c) EFFECTIVE DATE.—The amendments made by
14
this section shall apply to taxable years beginning after
15
December 31, 2022.
16
Æ
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