The "Performing Artist Tax Parity Act of 2025" modifies tax deductions for performing artists, adjusting income thresholds and expense definitions to provide fairer tax treatment.
Mark Warner
Senator
VA
The "Performing Artist Tax Parity Act of 2025" modifies tax deductions for performing artists, allowing them to deduct more expenses above-the-line. The deduction is phased out starting at $100,000 of gross income, adjusted annually for inflation. It also clarifies that deductible expenses include commissions and raises the threshold for nominal employers to $500, also adjusted for inflation.
Performing Artist Tax Act Updates Deductions, Adds $100K Income Cap for Full Benefit Starting 2025
Alright, let's break down the Performing Artist Tax Parity Act of 2025. Essentially, this bill changes the rules for how performing artists – think musicians, actors, dancers – can deduct their work expenses on their taxes, kicking in for tax years after December 31, 2024.
The Deduction Details: What's Changing?
The big news is an update to the 'above-the-line' deduction for artist expenses. This type of deduction lowers your Adjusted Gross Income (AGI), which is generally better than itemizing. The bill keeps this deduction but introduces an income limit. If a performing artist's AGI tops $100,000, the amount they can deduct starts to shrink. Specifically, Section 2 states the deduction gets reduced by 10% for every $2,000 earned over that $100,000 threshold. So, an artist earning $104,000 would see their potential deduction cut by 20%.
Agent Fees and Small Gigs
Good news for artists with representation: the bill explicitly clarifies that commissions paid to managers or agents count as deductible business expenses under this rule (Section 2). This removes ambiguity. Additionally, the bill raises the threshold for what's considered a 'nominal employer' – basically, someone who pays an artist a small amount for a gig. That threshold goes from $200 up to $500. This might simplify things slightly for artists taking on lots of small, one-off jobs, potentially reducing paperwork tied to tiny payments.
Keeping Pace with Inflation
Recognizing that costs go up, the bill includes annual inflation adjustments for both the $100,000 income threshold and the $500 nominal employer limit, starting after 2025 (Section 2). The $100,000 limit will adjust in $1,000 increments, and the $500 limit in $50 increments. This aims to keep the rules from becoming outdated too quickly, though it does mean artists will need to check the adjusted figures each tax year. The core impact remains: artists earning significantly over $100k (adjusted for inflation) will see less benefit from this specific deduction over time.