Is your next project a feature film, television series, relocated television series, television pilot, or a film for television? Your production may be eligible for the New York State Film Tax Credit. The Film Production Tax Credit is a 30% tax credit on qualified costs incurred in New York State for eligible productions. Eligibility requirements vary based on the type of film production company and the budget. Qualified productions must use New York crew, New York vendors, and use New York production facilities and suppliers.
Non-qualified production costs are not eligible for the tax credit. Non-qualified production costs include most above-the-line costs, such as story and script costs (intellectual property rights), and wages for writers, directors, producers and actors. Those below-the-line costs which do not qualify include costs for entertainment and for travel for out-of-town labor. In addition, documentaries, news programs, reality TV shows, sporting events, commercials and music videos are not eligible for the NYS tax credit.
Taxpayers can only claim the credit after the production company has received a Tax Credit Certificate, which is generally issued within 30 to 60 days of submitting the final application. The credit is reported to the production company. Since most films are produced via a pass-through entity, such as a LLC or partnership, the credit would be reported as a pass-through to the LLC members or partners, who claim the credit as a refund on their personal tax returns. The taxpayer then claims the credit on the annual tax return for the year in which the project is completed. The refundable amount is offset against an individual’s tax liability. Thus, a taxpayer can claim a refund on their unused tax credits.
Further definition of certain terms such as film production facility, qualified production facility and armories are provided in the Program Guidelines. For more details, visit the New York State Film Production Tax Credit website: https://esd.ny.gov/new-york-state-film-tax-credit-program-production