Strike pay would become tax-free under proposed federal bill

What does this do?

HR 8816 would remove strike benefits from federal taxable income, meaning union members would no longer owe federal income tax on payments received during a strike, lockout, or work stoppage. The bill covers payments made by tax-exempt labor unions under either the National Labor Relations Act or the Railway Labor Act. It would also count strike benefits as earned income for the Earned Income Tax Credit, potentially affecting how some lower-income workers qualify for or calculate that credit.

Who does it affect?

The bill directly affects union members who receive official strike pay from a labor organization during a strike or lockout. Non-union workers and workers not receiving formal strike benefits from a union are not affected.

Why does it matter?

Workers who receive strike benefits would owe less in federal income taxes on those payments. The federal government would collect less revenue from strike benefit payments as a result of the exclusion.

What does it cost, and who pays?

• Strike pay no longer taxed federally
• Govt collects less revenue on benefits
• Takes effect Jan. 1, 2027