Frequently Asked Questions
What is the Performing Artist Tax Parity Act?
The bipartisan Performing Artist Tax Parity Act (PATPA) H.R. 4750/S.2872, introduced by Reps. Judy Chu (D-CA) and Vern Buchanan (R-FL) and Sens. Mark Warner (D-VA) and Bill Hagerty (R-TN) updates the Qualified Performing Artist deduction so that middle-class entertainment workers can deduct their common work expenses.
PATPA raises the AGI ceiling to $100,000 for single taxpayers and $200,000 for a couple filing jointly, with a built-in phase out to help transition the taxpayer out of the deduction. According to a study from the Macrodyn Group, the impacts of PATPA on income tax revenue losses are estimated to be small relative to the size of the federal budget, in the range of $65 million to $226 million, depending on some partially offsetting positive revenues from state and local governments and various other sources of tax revenues.
What is the Qualified Performing Artist (QPA) deduction?
The Qualified Performing Artist (QPA) deduction, § 62(a)(2)(B) is a provision of the tax law that allows certain performing artists the option to deduct expenses incurred in the course of their employment. This is an “above the line” deduction. Signed into law in 1986 by President Reagan, eligibility for the QPA deduction has remained unchanged since it was passed — limiting the adjusted gross income of the taxpayer to $16,000.
Who is a “Qualified Performing Artist” under the tax code?
Performed services in the performing arts for at least two different employers during a taxable year; and
Whose amount of allowable deductions exceeds 10 percent of such individual’s gross income attributable to those services; and
Whose adjusted gross income does not exceed the salary cap.
What are qualified Expenses?
All ordinary and necessary work expenses paid or incurred during the taxable year in carrying on their profession, including education and training, agents’ fees, advertising and promotion, equipment, and transportation and other job search expenses.
Common business expenses of a working artist:
Talent agents and professional managers
Professional network affiliations
Audition transportation, job searching, and marketing
Headshots $500-$1,000
Video reels $500-$1,000
Audio reels $500-$1,000
Professional development/training/ coaching
Supplies - makeup, wardrobe, hair, software, special equipment