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SB 1543

INC TX-UNION DUES

104th Regular Session Introduced by Christopher Belt and 1 co-sponsor

Illinois would allow a state tax deduction for union dues, reducing base income for eligible taxpayers.

Rule 3-9(a) / Re-referred to Assignments
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Bill Summary · SB 1543

Summary — SB 1543 (Illinois) — “Union Dues” (Income Tax Deduction)

Note: The materials provided include multiple distinct bills numbered SB 1543 from other states (Arizona/Hawaii) that are unrelated. This summary covers the Illinois measure titled in the packet as an amendment to the Illinois Income Tax Act concerning union dues (introduced by Sen. Ram Villivalam).

Main purpose

Create a state income tax deduction in Illinois for union dues paid by individual taxpayers, to offset the fact that many such dues are no longer deductible at the federal level.

Key provisions

  • Amends the Illinois Income Tax Act (35 ILCS 5/203) to provide a deduction from base (Illinois taxable) income for union dues paid by the taxpayer during the taxable year.
  • If the taxpayer was not permitted to deduct those union dues on the federal return (under the Internal Revenue Code), the taxpayer may deduct the full amount of union dues paid from Illinois base income.
  • If some portion of the union dues was allowed as a federal miscellaneous itemized deduction, the Illinois deduction is limited to a (specified) percentage of the portion of dues that were disallowed federally. (The summary text describes a “specified percentage”; the exact percentage language is not included in the excerpt.)
  • The deduction is exempt from the act’s automatic sunset provision (i.e., it is intended to be permanent).
  • Effective immediately (applies beginning the taxable year determined by the effective date).

Who is affected

  • Illinois individual income taxpayers who pay union dues or similar mandatory employee organization assessments.
  • The largest beneficiaries will be taxpayers who cannot claim union dues as a federal miscellaneous itemized deduction (post-TCJA treatment), because they would be able to reduce their Illinois taxable income by the dues amount.
  • Employers and unions are indirectly affected by potential changes in member after‑tax costs; local fiscal authorities and state revenue officials are affected by changes in tax receipts.

Fiscal and administrative impact

  • Likely to reduce Illinois individual income tax receipts to the extent taxpayers claim the new deduction. The provided materials do not include an estimate of revenue impact.
  • Implementation requires adjustments to state individual tax forms, instructions, and withholding/estimation guidance to allow reporting/deduction of union dues.
  • Tax administration will need to clarify documentation requirements (e.g., how taxpayers substantiate amounts paid).

Status and sponsors (from packet)

  • Introduced 2/4/2025 by Sen. Ram Villivalam; chief cosponsor added (Christopher Belt) on 2/7/2025.
  • Referred to committee(s) on introduction. (No final enactment date listed in the excerpt.)
  • Bill text in packet states “Effective immediately.”

Notes / open questions

  • The excerpt mentions a “specified percentage” when part of dues were federally deductible; the exact percentage (or formula) is not shown in the excerpt and must be confirmed in the full bill text.
  • No fiscal note or revenue estimate was included in the provided materials; legislative fiscal analysis would be needed to quantify the revenue effect.
  • If enacted effective immediately, taxpayers and the Department of Revenue would need prompt guidance for application to the current or next tax year.

If you want, I can:
- Locate and cite the full bill text to confirm the percentage and exact statutory language, or
- Draft a plain‑language example showing how the deduction would change a sample taxpayer’s Illinois tax liability.

Compiled from official sources — confirm details with the bill’s official record.

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