Lawmakers introduce tax deduction fix for performing artists

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A pair of lawmakers in Congress, Rep. Judy Chu, D-Calif., and Vern Buchanan, R-Fla., introduced bipartisan legislation Wednesday to fix a problem in the Tax Cuts and Jobs Act that makes it difficult for performing artists to deduct their work-related expenses.

The bill, known as the Performing Artist Tax Parity Act, would update the Qualified Performing Artist (QPA) tax deduction that helps artists deduct the costs of work-related expenses. The Tax Cuts and Jobs Act eliminated the ability to claim miscellaneous itemized deductions, which used to enable artists to deduct their work expenses. The elimination of these deductions has caused many artists to pay thousands more in taxes, the lawmakers noted. The Performing Artist Tax Parity Act would fix this problem by updating the thresholds of the Qualified Performing Artists Deduction to permit more lower- and middle-income artists to use it.

“Expenses like head shots, transportation, and more force professional artists to spend up to 30 percent of their gross incomes just to stay in business each year,” Chu said in a statement. “For years, these expenses could be written off in their taxes, but that deduction was lost in the new tax law, requiring artists to spend thousands more. This is an untenable hit to working families that hurts our economy and communities. I am glad that Rep. Buchanan and I could find a bipartisan solution to fix this problem and even the playing field for our country’s performing artists.”

The new bill would ensure that actors, stage managers and other performing artists aren’t unintentionally hit by tax increases because of the Tax Cut and Jobs Act.

“The overwhelming majority of performing artists are lower-income and middle-class Americans struggling to make ends meet,” Buchanan stated. “Congresswoman Chu and I are fighting to update this 30-year-old law to deliver needed tax relief for performing artists in Southwest Florida and elsewhere.”

The bill has received support from the Actors Equity union. “The overwhelming majority of Equity members are middle-class Americans who work hard to earn health care and make ends meet,” said Actors’ Equity Association President Kate Shindle in a statement. “Over the last few months, we’ve heard from countless actors and stage managers that their taxes have gone up significantly. We are grateful for the leadership of Representatives Chu and Buchanan as they fight for tax fairness for performing artists.”

The bill would update the bipartisan Qualified Performing Artist deduction that was originally signed into law by President Ronald Reagan. The QPA permits an above-the-line tax deduction for qualified performing artists but has been limited since it was enacted to a total adjusted gross income of the taxpayer to $16,000. PATPA would update the deduction to $100,000 for single filers and $200,000 for married artists filing jointly.

Actors’ Equity has been pushing for a legislative change to the Tax Cuts and Jobs Act to provide tax parity for actors and stage managers. Over the past year Equity members have held more than 40 meetings with congressional offices to support the Performing Artist Tax Parity Act. Last year, Sandra Karas, a working actor, licensed tax attorney and chair and director of the Volunteer Income Tax Assistance program at Equity’s New York office, toured the country to help educate Equity members about how changes in the most recent round of tax reform would impact them, with stops in Chicago, Los Angeles, San Francisco, New York, Orlando, Washington, D.C. and Philadelphia, along with an online seminar.

Actors’ Equity also submitted testimony in conjunction with the SAG-AFTRA union to the House Ways and Means Committee on the need for tax fairness for actors and stage managers, and Equity retained Meltsner Strategies to help advise on its legislative strategy.

SAG-AFTRA President Gabrielle Carteris said, “Our members incur costs simply in the process of applying for jobs that they might not secure. The introduction of the bipartisan Performing Artist Tax Parity Act is a major first step toward ensuring that performing artists will be safeguarded from future unintentional tax increases. We would like to thank Representatives Chu and Buchanan for introducing this bill. SAG-AFTRA members work hard to entertain people around the globe while providing for their families. Any slight changes in their income could be detrimental and it is imperative that tax reform protects our community of performing artists as well as hardworking middle-class Americans.”

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Tax deductions Finance, investment and tax-related legislation Tax reform