What is it?
Film and television producers in New York State (NYS) are able to claim back money on their projects in the form of a refundable tax credit. The tax credit hopes to encourage creative professionals to create film and television content in NYS to help the industry thrive and keep the State's economy healthy. The incentive is available to qualified production companies that produce a variety of media outputs such as feature films, television series or television pilots. They may also be able to claim credit on post-production costs that link back with the original project.
How much can be claimed?
The programme allows companies to recover as much as 30% of costs, be it post or qualified production but above 30% may be claimed if the work was carried out in a number of counties in Upstate New York. An extra 5% credit is available as part of the State's Post-Production Programme if the costs were incurred in Upstate NY. Any project with a budget greater than $500,000 can also file for an extra 10% credit (up to $5 million per year) if they incurred labour expenses.
What counts as a cost?
Production costs such as services used or tangible property are included within a claimable bracket. Set construction, sound equipment, props, wardrobe, meals etc. are all defined as 'production costs' as well as film-editing, visual effects and sound design all grouping into 'post-production costs'. The crew, vendors, suppliers and facilities must all be based in New York.
What doesn't count?
Non-qualified production costs such as scripts and wages of actors/directors are not eligible, nor are costs for travelling outside of NYS. The credit is not available for the production of documentaries, reality shows, news programmes or any commercials, music videos or sporting events. It is also advised that you record any costs for qualified and non-qualified production separately, as you will not be able to claim money spent on non-qualified items.
Am I eligible?
Your budget and type of production company both effect your eligibility. At least 75% of the principal photography days must be shot in NYS and at least 10% of the total principal photography shooting days must be at a qualified production facility (QPF) in NYS, but these will vary. There is also a post-production credit if the project was filmed outside of NYS but the post-production work is accredited to specialisers in NYS.
How do I claim?
The 3 stages are: submission of initial application (submitted prior to start of principal photography), submission of final application (submitted within 60 days of completing post production), and audit of the final application.
Once you have received a Tax Credit Certificate (usually issued 30-60 days after submitting final application), only then can taxpayers claim and the credit will be awarded directly to the production company. More often than not, the credit will be passed through the LLC member or partner the film has been produced via. Both parties then claim the credit on the annual tax return for the year the project was completed in. The refundable amount is offset against an individual’s tax liability.
If the credits fall between $1-5 million, they must be claimed over 2 years (50% each year). Over $5 million in credits take 3 years to claim (33% each year). Any credits below $1 million can all be claimed in a single taxable year.