Leaders of Hollywood’s unions and guilds are calling on Congress to pass the Performing Artist Tax Parity Act (PATPA) before Republicans take control of the House of Representatives in January. The legislation would restore tax breaks for work-related expenses by updating the Qualified Performing Artist (QPA) deduction and modernizing a provision that has been on the books since it was signed into law in the 1980s by President Ronald Reagan. The provision would allow middle-class entertainment workers to again deduct common business expenses.
Currently, the adjusted gross income threshold for the QPA deduction is $16,000, which has been unchanged since QPA’s inception in 1986. PATPA would raise the threshold of the QPA deduction to $100,000 for single taxpayers and $200,000 for joint filers to help ensure middle-class entertainment workers qualify for the deduction.
In a letter sent today to the leaders of the House Ways and Means Committee and the Senate Committee on Finance, the union leaders said that “The ability to claim the QPA deduction would have a meaningful impact on the lives of middle-class entertainment workers and their families. According to information from the Volunteer Income Tax Assistance program at the Actors’ Equity office in New York, a Pennsylvania sound engineer would realize a tax savings of over $4,500 under PATPA. A Nevada actor would pay $1,500 less in taxes. A New York musician would save $3,000. Instead of paying unnecessarily burdensome tax bills, these middle-class professionals will be able to put their money toward seeking continued work, making the next month’s rent, putting food on the table, and contributing to their local economies.”
Signing the letter were:
SAG-AFTRA president Fran Drescher
DGA president Lesli Linka Glatter
IATSE president Matthew Loeb
WGA East president Michael Winship
Actors’ Equity president Kate Shindle
American Federation of Musicians president Ray Hair
Jennifer Dorning, president of the Department for Professional Employees, AFL-CIO
Raymond Menard, president of the American Guild of Musical Artists
Evan Yionoulis, president of the Stage Directors and Choreographers Society
Richard Lanigan, president of the Office and Professional Employees International Union.
“Most entertainment workers, including members of our unions, spend 20 to 30 percent of their income on necessary work expenses,” their letter says. “Typical expenses might include transportation to an audition, a talent agent and manager, or equipment such as expensive cameras, musical instruments, or tools. An unfortunate and unintended consequence of the last tax reform bill was the elimination of the ability of entertainment workers to deduct these common work expenses. Subsequently, many of our members and other workers in the industry struggle to pay burdensome amounts in taxes, making it difficult for them to make ends meet. Further, these workers face a tax code that punishes them for seeking employment.
“After their industry was completely shut down by the pandemic, entertainment workers are still trying to get back on their feet,” said DPE president Dorning, whose umbrella organization helped organize the letter-writing campaign. “PATPA will put money back in the hands of entertainment workers to help them pay their rent, put food on the table, and contribute to their local economies. Entertainment workers should not be punished by the tax code for seeking employment. We urge Congress to fix this problem by passing the bipartisan Performing Artist Tax Parity Act.
“We urge you to include PATPA in any year-end tax legislation,” the letter says. “PATPA will bring much needed tax fairness to hard working Americans who simply want to keep working in the entertainment industry during the challenging Covid recovery period.”