Last July, the Recording-Academy-backed Helping Independent Tracks Succeed (HITS) Act was signed into law, marking a major milestone for the music community after more than five years of dedicated advocacy by the Academy and its members. As we approach the 2026 tax filing deadline — Wednesday, April 15, 2026, to file 2025 tax returns — here's what music makers need to know about this new addition to the tax code.

What does the HITS Act do?

The HITS Act allows artists, songwriters, and producers to deduct production expenses for qualified sound recordings in the same year they are incurred, rather than amortizing these costs over time.

With the HITS Act as the law of the land, independent creators now have access to meaningful tax relief designed to support, promote, and sustain music production.

Who qualifies for tax deductions?

Anyone who incurs eligible recording expenses during the year qualifies for the deduction: independent artists, songwriters, producers, and record labels.

What qualifies for tax deductions?

Deductible expenses include any costs directly related to the creation of a recording, potentially including: rental fees for studio time; payments to session musicians; engineer and producer fees; mixing and mastering costs; and equipment purchases or rentals. The deduction can apply to song demos, albums/LPs, EPs, singles, and digital-only releases. Expenses related to marketing, touring, and distribution are not eligible.

How much can I deduct from my expenses?

Eligible individuals can deduct up to $150,000 cumulatively per year, as long as the recording is produced in the United States.

What is bonus depreciation?

In addition to allowing the deduction of recording expenses immediately in the year that costs are incurred, the HITS Act also provides a benefit called "bonus depreciation." This provision allows expenses to be claimed in the year that a qualified sound recording is "placed into service." A sound recording is considered placed into service at the time of initial release or broadcast. Bonus depreciation gives creators another option and the flexibility to find the tax benefit that works best for their unique situation.

How can creators take advantage during the current tax season?

Check with a tax professional to ensure you are making the most of the new benefits provided by the HITS Act on your 2025 tax return. To make things easier and more accurate, keep and maintain thorough documentation of all production-related expenses throughout the year.

Want to learn more?

Creators can learn more by watching a discussion featuring Recording Academy Chief Advocacy & Public Policy Officer Todd Dupler, tax specialist Michelle Butler, and Grammy-winning singer/songwriter Nicole Zuraitis, who together break down how the HITS Act works in practice. Watch the conversation in full above.