Strike and Lockout Benefits: Are They Taxable?
Published November 6, 2026
Money a union pays you during a strike or a lockout is usually income. Many people assume strike pay is not taxable because it helps them get by. The IRS rule is different. This guide explains the rule, the narrow exception, and what to keep on record. It is general information. It is not advice about your return.
What the rule says
Benefits paid to you by a union as strike or lockout benefits are usually included in your income as compensation. The rule covers cash. It also covers the fair market value of other property the union gives you. Publication 525 states this rule in its section on miscellaneous income. The rule covers both strike benefits and lockout benefits.
The narrow exception
You can leave these benefits out of your income only when the facts clearly show that the union intended them as gifts to you. The word "clearly" matters. Helping someone through a hard time does not, by itself, show that a payment was a gift. The union's purpose and the facts around the payment must make the gift clear. In most strike situations, the usual rule applies.
To decide whether the exception applies, look at the facts: how the union described the payment, who received it, and why the union paid it. Write down what the union said about each payment, because that record helps you explain the result later.
Cash and other property
Strike benefits can come as cash, a check, or other property. If the union gives you property instead of cash, the fair market value of that property is the amount you include in income. Keep a note of the date you received each payment and the value of anything other than cash. Write down how you figured each value, too.
Why the record matters
Strike and lockout payments can come over several weeks or months. A running list makes it easier to total the income for the year. It also shows the date of each payment, so you can match each one to the correct year.
An example
Lee is a union member during a strike. The union pays Lee $400 a week for four weeks, a total of $1,600. The union also gives Lee a gift card worth $50. The benefits were paid as strike support, so the usual rule applies. Lee includes the full $1,650 in income. This example uses made-up figures. It shows the rule. It is not a result for a real union or a real payment.
Common mistakes
- Assuming strike pay is not taxable because it is meant to help. The usual rule is that it is income.
- Leaving out non-cash benefits. Property counts at its fair market value.
- Relying on the gift exception without clear facts. The facts must clearly show a gift.
- Waiting until tax time to total the payments. A running list is easier to check.
Next steps
Keep a list of every strike or lockout payment and its date. Note any property the union gave you and its fair market value. Ask the union for a written statement of the benefits it paid. Keep the list with your tax papers for the year. If a form shows a different amount than your own list, check the difference before you file. Include the total in your income on your return. If you also received other benefits, read our guide to unemployment benefits and whether they are taxable to compare the rules.
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Sources: Sources: IRS, Publication 525 (2025), Taxable and Nontaxable Income, Strike and lockout benefits (https://www.irs.gov/pub/irs-pdf/p525.pdf) This is general information, not advice about your specific return.
