HB5221 Summary

• Creates a state income tax deduction for union dues paid by taxpayers during taxable years beginning on or after January 1, 2023, when federal deduction is not allowed.

• Allows full deduction of union dues if taxpayer was not allowed a federal deduction under Section 67 of the Internal Revenue Code (2% floor limitation on miscellaneous itemized deductions).

• If any union dues were allowed as federal miscellaneous itemized deductions, the Illinois deduction is limited to a percentage of the disallowed union dues, calculated based on the ratio of federal miscellaneous deductions allowed to total miscellaneous deductions before the 2% floor.

• Defines "union dues" as amounts deductible as union dues and agency shop fees under Section 162 of the Internal Revenue Code.

• Exempts this deduction from the Act's automatic sunset provision and makes the bill effective upon becoming law.