The bill would update the existing Qualified Performing Artist (QPA) tax deduction originally signed into law by President Reagan in 1986 to adjust for increased cost of living.
Reps. Vern Buchanan and Judy Chu reintroduced the Performing Arts Tax Parity Act to addresses the business costs for performers, allowing them to deduct their legitimate expenses such as agent and manager fees.
Since being signed into law in 1986 by President Reagan, the tax code has allowed working artists the ability to take an above-the-line tax deduction for much-needed work-related expenses. However, this provision has not been updated since its inception nearly four decades ago. Today, it is only available to those making less than $16,000 a year.
Under current law, a Qualified Performing Artist is defined as having: 1) performed services in the performing arts for, at minimum, two different employers during a taxable year, 2) an amount of allowable deductions exceeding 10 percent of their gross income related to those services and 3) an adjusted gross income of no more than $16,000.
To better reflect today’s cost of living, Buchanan’s bill would update and increase the income ceiling to reflect today’s cost of living more appropriately: $100,000 for individuals and $200,000 for married joint filers. PAPTA includes an automatic Consumer Price Index for All Urban Consumers (CPI-U) increase to ensure that the deduction remains relevant as the cost of living increases in the future.