H.R.721 - Performing Artist Tax Parity Act of 2025 (119th Congress)
Summary
H.R.721, the Performing Artist Tax Parity Act of 2025, aims to amend the Internal Revenue Code of 1986 to increase the adjusted gross income (AGI) limitation for above-the-line deductions of expenses for performing artists. This bill seeks to provide tax relief to performing artists by adjusting the income threshold for deducting business-related expenses. The bill also includes cost-of-living adjustments to the income thresholds and nominal employer thresholds.
Expected Effects
The bill's passage would allow more performing artists to deduct their business expenses above-the-line, reducing their taxable income. This could lead to increased financial stability for artists and incentivize participation in the arts. The cost-of-living adjustments would help maintain the value of the deduction over time.
Potential Benefits
- Increased Tax Savings: Performing artists with lower to middle incomes would benefit from increased tax deductions.
- Simplified Tax Filing: Above-the-line deductions are simpler to claim than itemized deductions.
- Support for the Arts: Providing financial relief to artists could encourage more people to pursue careers in the performing arts.
- Cost-of-Living Adjustments: The bill includes adjustments to account for inflation, preserving the value of the deduction over time.
- Clarification on Manager/Agent Commissions: Explicitly includes commissions paid to managers or agents as deductible expenses.
Potential Disadvantages
- Potential Revenue Loss: Increased deductions could lead to a decrease in federal tax revenue.
- Complexity: The phaseout mechanism based on income could add complexity to tax calculations.
- Limited Scope: The bill only benefits performing artists, potentially creating disparities with other professions.
- Threshold Effects: Artists with incomes slightly above the threshold may not receive the full benefit of the deduction.
- Administrative Burden: The IRS may face increased administrative burden in verifying eligibility and processing deductions.
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble), as it aims to support individuals in the performing arts, potentially enriching the nation's cultural landscape. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States, as stated in Article I, Section 8, Clause 1. The bill falls under this power as it amends the Internal Revenue Code related to taxation.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).