HR721-119

What This Bill Does

The Performing Artist Tax Parity Act of 2025 updates Internal Revenue Code section 62's qualified performing artist deduction. It allows performing artists to deduct covered expenses above the line while changing the income limitation from a very low threshold to a $100,000 gross-income threshold, doubled for joint returns, with a phaseout that reduces expenses by 10 percentage points for each $2,000 of excess income or $4,000 for joint filers. The $100,000 threshold is indexed for inflation after 2025 using 2024 as the base year and rounded to the nearest $1,000. The bill expressly includes commissions paid to the performing artist's manager or agent. It raises the employer-payment threshold in the qualified performing artist test from $200 to $500, indexes that amount after 2025, and rounds to the nearest $50. It also replaces gendered wording and removes a cross-condition in the qualification test. The amendments apply to taxable years beginning after December 31, 2024.

Who Benefits and How

Performing artists, actors, musicians, dancers, comedians, stage performers, touring artists, artist managers, agents, and tax preparers serving creative workers benefit because more working artists can deduct unreimbursed or commission-related business expenses above the line. Married performers filing jointly benefit from doubled income thresholds. Inflation indexing keeps the thresholds from eroding after 2025.

Who Bears the Burden and How

Federal revenue collections bear the cost of expanded deductions. IRS forms staff, tax software providers, tax preparers, performing artists, managers, agents, and employers must track eligible commissions, employer payments, income thresholds, phaseout percentages, inflation adjustments, and documentation for expenses. Artists with income above the phaseout range lose some or all expense eligibility under the new formula.

Key Provisions

• Expands the qualified performing artist gross-income threshold to $100,000 and $200,000 for joint returns.
• Limits deductible expenses through a phaseout of 10 percentage points for each $2,000 of excess income or $4,000 for joint filers.
• Provides inflation indexing after 2025 using a 2024 base year and rounds the income threshold to the nearest $1,000.
• Adds commissions paid to a performing artist's manager or agent to the covered expense language.
• Expands the employer-payment threshold from $200 to $500 and indexes it after 2025.
• Modifies the effective date so the deduction changes apply to taxable years beginning after December 31, 2024.