Americans will soon start collecting checks and paperwork to prepare their taxes, and entertainment workers can expect burdensome tax bills because they can’t deduct necessary business expenses. In a letter sent today, the AFL-CIO Affiliated Entertainment Employees (DPE) called on Congress to restore tax fairness to these middle-class creative professionals by passing the Performing Artists Tax Parity Act (PATPA). , S. 2872/HR 4750.
“Entertainers should not be penalized under the tax code when they look for work,” said Energy Department Chairwoman Jennifer Durning. “We urge Congress to fix this problem by passing the Bipartisan Executive Tax Parity Act.”
Most entertainers spend 20 to 30 percent of their income on necessary business expenses, including transportation to auditions, talent agents, and equipment. Until 2019, total business expenses were deductible.
PATPA allows entertainment workers to deduct essential business expenses by updating the qualified performer’s (QPA) deduction. The QPA is a provision of the tax code that allows qualified entertainers to take a “general” deduction for certain unreimbursed expenses. Currently, the adjusted gross income limit for the QPA deduction is $16,000, which has not changed since the QPA was established in 1986 under President Reagan. PATPA will raise the QPA deduction threshold to $100,000 for individual taxpayers and $200,000 for donors to help ensure that middle-class entertainment workers qualify for the deduction.
Being able to claim the QPA deduction will have a significant impact on the lives of entertainment workers and their families. According to the New York Office of Representatives’ Voluntary Income Tax Assistance (VITA) program, a Pennsylvania audio engineer would see more than $4,500 in tax savings, a Nevada representative would pay $1,500 less in taxes and a New York musician would save. $3,000 under PATPA.
“With the pandemic shutting down their entire industry, entertainment workers are still trying to get back on their feet,” Durning said. “PATPA will put money back into the hands of entertainers to help pay their rent, put food on the table and boost their local economy.”
Labor organizations calling for adoption of the BATPA include:
- Actors Equity Association
- American Federation of Musicians
- Guild of Musical Artists of America
- Professional Personnel Division, AFL-CIO
- Directors Guild of America
- Italian American Actors Guild
- International Alliance of Theatrical Stagehands, Film Technicians, Artists and Allied Craftsmen
- International Federation of Professional and Office Personnel
- Screen Actors Guild – American Federation of Television and Radio Artists
- Association of Theater Directors and Choreographers
- Writers Guild America East
