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Special Project Deductions & Tax Incentives
These apply specifically to the costs of producing a film, TV show, or other qualifying project.
- Section 181 Deduction (Crucial Federal Incentive)
This is the primary federal tax incentive for film and television. It allows you to deduct up to $15 million of a production's costs in the year they are incurred, instead of capitalizing them over many years
. There is an important deadline: this provision applies to productions that begin filming by December 31, 2025, and may expire after that unless Congress extends it
.
Qualified Costs: Include wages for actors and crew, payments for property rights, and costs like completion bond premiums
.
Key Requirement: At least 75% of the total compensation (excluding residuals) must be for services performed in the United States
- Bonus Depreciation
For costs exceeding the Section 181 limit, you can use bonus depreciation. The applicable percentage is 40% for productions placed in service in 2025
. The remaining costs are then depreciated using other methods- .
- State Film Incentives
Most states offer additional tax credits, rebates, or grants. These are separate from federal deductions and can significantly reduce your final tax bill or even result in a cash refund
. For example, California offers a base credit of 35% on qualified expenditures, while Georgia offers a 20% base credit.
State Film Incentives
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| State | Incentive Type | Credit/Benefit Details | Annual Cap / Limits | Key Notes |
|---|---|---|---|---|
| 2.PUBLIC/0.locScore/States/Georgia | Transferable Tax Credit | 20% base + 10% bonus for Georgia logo usage; applies to production & post-production costs | No annual cap | No salary caps; credits can be sold; includes resident & non-resident payroll |
| 2.PUBLIC/0.locScore/States/California | Film & TV Tax Credit Program 4.0 | Up to 30% credit; cap increasing from $330M to $750M starting July 2025 | $750 million (proposed) | Large program with tiered credits; significant changes coming mid-2025 |
| 2.PUBLIC/0.locScore/States/New York | Film & TV Tax Credit | 25% base + bonuses; new 10% credit for long-term studio partners; independent film credit at 30% | $800 million annually | Tiered payout removed; extended through 2036; ATL cap removed |
| Louisiana | Film Tax Credit | 25% credit on qualified expenditures | $125 million (reduced from $150M in July 2025) | Annual cap reduced due to budget constraints |
| New Mexico | Refundable Tax Credit | 25% base + up to 15% bonuses (TV series, facilities, rural areas, non-resident crew) | $130 million (FY24), rising to $160M by FY28 | Credits can reach up to 40%; Film Partner status grants unlimited funds |
| New Jersey | Transferable Tax Credit | 30%–35% transferable tax credit + bonuses for qualified productions | $300 million general, +$250 million for studios | Strong program with bonuses for studio partners |
| Montana | Film Tax Credit (proposed) | Significant increase in annual cap from $12M to $350M | $350 million (proposed) | Aims to boost film industry growth |
| Nevada | Film Tax Credit (proposed) | Up to $80 million in infrastructure credits; non-infrastructure credits raised from $10M to $25M | $80 million infrastructure, $25 million others | Includes diversity hiring mandates |
| Massachusetts | Payroll & Production Credit | 25% payroll credit + 25% production credit + sales tax exemption | No annual or project cap | Requires 75% of expenses or principal photography in state |
| Alabama | Film Tax Credit | Credit on first $20 million of qualifying expenditures | $20 million cap | Minimum $500,000 spend required |
| Arizona | Refundable Tax Credit | Base credit + 2.5% bump for Arizona resident labor + 2.5% for use of qualified production facility | Not specified | Requires primary shooting and hiring in Arizona |
| Arkansas | Transferable Tax Credit | Credit on development, pre-production, production, post-production costs; excludes commercials, talk shows | Not specified | Eligible for animation, documentaries, feature films, scripted TV |
| Minnesota | Refundable Tax Credit | Increased cap from $5 million to $25 million; extended 8 years | $25 million | |
| Texas | Filming Grant | Increased from $45 million to $200 million | $200 million | |
| Colorado | Refundable Tax Credit | Changed from cash rebate to refundable tax credit starting 2024 | Not specified | |
| Missouri | Film Tax Credit | 20% base credit + up to 40% with boosts | Not specified | Program reinstated recently |
| Mississippi | Cash Rebate | 35% cash rebate on payroll paid to resident cast and crew | Not specified | Payroll must be subject to Mississippi income tax |
| State | Incentive Type | Credit/Benefit Details | Annual Cap / Limits | Key Notes |
|---|---|---|---|---|
| Georgia | Transferable Tax Credit | 20% base + 10% bonus for Georgia logo usage; applies to production & post-production costs | No annual cap | No salary caps; credits can be sold; includes resident & non-resident payroll |
| California | Film & TV Tax Credit Program 4.0 | Up to 30% credit; cap increasing from $330M to $750M starting July 2025 | $750 million (proposed) | Large program with tiered credits; significant changes coming mid-2025 |
| New York | Film & TV Tax Credit | 25% base + bonuses; new 10% credit for long-term studio partners; independent film credit at 30% | $800 million annually | Tiered payout removed; extended through 2036; ATL cap removed |
| Louisiana | Film Tax Credit | 25% credit on qualified expenditures | $125 million (reduced from $150M in July 2025) | Annual cap reduced due to budget constraints |
| New Mexico | Refundable Tax Credit | 25% base + up to 15% bonuses (TV series, facilities, rural areas, non-resident crew) | $130 million (FY24), rising to $160M by FY28 | Credits can reach up to 40%; Film Partner status grants unlimited funds |
| New Jersey | Transferable Tax Credit | 30%–35% transferable tax credit + bonuses for qualified productions | $300 million general, +$250 million for studios | Strong program with bonuses for studio partners |
| Montana | Film Tax Credit (proposed) | Significant increase in annual cap from $12M to $350M | $350 million (proposed) | Aims to boost film industry growth |
| Nevada | Film Tax Credit (proposed) | Up to $80 million in infrastructure credits; non-infrastructure credits raised from $10M to $25M | $80 million infrastructure, $25 million others | Includes diversity hiring mandates |
| Massachusetts | Payroll & Production Credit | 25% payroll credit + 25% production credit + sales tax exemption | No annual or project cap | Requires 75% of expenses or principal photography in state |
| Alabama | Film Tax Credit | Credit on first $20 million of qualifying expenditures | $20 million cap | Minimum $500,000 spend required |
| Arizona | Refundable Tax Credit | Base credit + 2.5% bump for Arizona resident labor + 2.5% for use of qualified production facility | Not specified | Requires primary shooting and hiring in Arizona |
| Arkansas | Transferable Tax Credit | Credit on development, pre-production, production, post-production costs; excludes commercials, talk shows | Not specified | Eligible for animation, documentaries, feature films, scripted TV |
| Minnesota | Refundable Tax Credit | Increased cap from $5 million to $25 million; extended 8 years | $25 million | |
| Texas | Filming Grant | Increased from $45 million to $200 million | $200 million | |
| Colorado | Refundable Tax Credit | Changed from cash rebate to refundable tax credit starting 2024 | Not specified | |
| Missouri | Film Tax Credit | 20% base credit + up to 40% with boosts | Not specified | Program reinstated recently |
| Mississippi | Cash Rebate | 35% cash rebate on payroll paid to resident cast and crew | Not specified | Payroll must be subject to Mississippi income tax |