 NAMM is pleased to support the Performing Artist Tax Parity Act (H.R. 4750 and S. 2872); federal legislation which would restore and update a tax deduction to help performing artists deduct business expenses. The legislation is sponsored in the House by Reps. Judy Chu (D-CA) and Vern Buchanan (R-FL) and in the Senate by Sens. Mark Warner (D-VA) and Bill Hagerty (R-TN).
A provision in the Tax Cuts and Jobs Act of 2017 largely eliminated the option to claim miscellaneous itemized deductions that allowed many performers and other artists to deduct work expenses not covered by their employers. As a result, many artists ended up paying more in taxes since the costs of instruments, equipment, travel, and other business-related costs were no longer deductible.
To address this problem, the Performing Artist Tax Parity Act would revise and expand the Qualified Performing Artist (QPA) tax deduction. QPA allows eligible performing artists, such as musicians, actors, and others employed in the performing arts, the option to take an “above the line” deduction for unreimbursed expenses. But the current adjusted gross income maximum threshold for the QPA deduction is just $16,000 – a level unchanged since QPA’s inception in 1986. The current threshold, as established more than 50 years ago, severely limits the number of individuals eligible for the QPA deduction. The legislation would make business expense deductions more widely available by modernizing the QPA’s income thresholds.
The bill increases the income level to $100,000/single taxpayer and $200,000/joint filers, adds a built-in phase-out of the deduction and provides threshold income increases based on the Consumer Price Index. With these revisions, more lower and middle-income performers would be eligible for the QPA deduction.
Congressional sponsors are seeking to advance the bill this year, possibly through inclusion in an end-of-the-year tax measure. In addition to NAMM, supporters of the legislation include the American Composers Forum, Americans for the Arts, Actors’ Equity Association, American Federation of Musicians, League of American Orchestras, SAG-AFTA and the Motion Picture Association. NAMM will continue to monitor this issue and will post updates here as they are available.
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