This bill modifies the tax code to allow performing artists to deduct business expenses above the line, subject to new income phase-out rules and inflation adjustments.
Mark Warner
Senator
VA
The Performing Artist Tax Parity Act of 2025 modifies the above-the-line deduction for performing artists' business expenses, including agent commissions. It introduces a phase-out of this deduction for artists earning over $100,000, with the threshold subject to future inflation adjustments. Additionally, the bill raises the employer wage threshold used in determining deduction applicability from $200 to $500, also subject to inflation indexing. These changes aim to provide greater tax parity for performing artists.
New Tax Rule for Artists: $100K Income Triggers Sharp Cut to Expense Deductions Starting in 2025
The “Performing Artist Tax Parity Act of 2025” is changing how working artists—think musicians, actors, and dancers—can write off their business expenses. This legislation modifies Section 62(a)(2)(B) of the Internal Revenue Code, which deals with “above-the-line” deductions. This is a big deal because an above-the-line deduction lowers your Adjusted Gross Income (AGI), meaning you get the benefit even if you take the standard deduction, rather than having to itemize.
The Good News: Commissions and Inflation Protection
First, the clear win: The bill explicitly confirms that commissions paid to managers and agents count as deductible expenses. For anyone in the performing arts, these commissions are often the single largest business cost, so having this clarity is helpful. Second, the bill introduces inflation adjustments starting after 2025. The key income threshold and the definition of a “nominal employer” will be indexed to the cost of living, which means the value of this deduction shouldn’t erode over time due to inflation. This kind of automatic adjustment is a smart feature that keeps policy relevant.
The Catch: Hitting the $100K Wall
Here’s where things get complicated, especially for artists moving up the income ladder. The bill introduces a strict phase-out for this deduction if the artist’s gross income exceeds $100,000. Once you cross that line, the amount of expenses you can deduct starts shrinking fast. For every $2,000 you earn over the $100,000 threshold (or any fraction of $2,000), the deductible amount is reduced by 10 percentage points. For example, if an artist earns $102,000, they lose 10% of their expense deduction. If they hit $104,000, they lose 20%. This continues until the deduction is completely phased out. This structure creates a sharp financial cliff: earning just a little bit more above $100,000 can suddenly cost an artist a lot in lost deductions, disproportionately affecting those in the middle income bracket.
Small Employers Get a Break on Paperwork
The legislation also cleans up the rules around who counts as a “nominal employer” for these deduction purposes. Currently, if an employer pays an artist less than $200, they are considered nominal. This bill raises that threshold to $500, effective for tax years starting after 2024. For small theaters, local venues, or short-term gigs, this means an employer has to pay you more than $500 in wages before the specific rules governing these deductions kick in. This change, which is also subject to inflation adjustments, simplifies compliance for very small employers in the arts sector, reducing their administrative burden slightly.