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Federal Film Tax Credit: What to Know

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A film tax credit bill that supporters hope will bring tens of thousands of jobs back to the United States is expected to be introduced in Congress on Thursday after a decades-long effort for federal support of the industry. The New York Times has reviewed the text of the bill, which provides a tax credit of at least 20 percent on the wages of the vast array of workers who create movies and TV shows. That includes actors and directors as well as camera operators and makeup artists. The proposal faces formidable obstacles in a divided Congress that has struggled to agree on any major policy changes and where tax legislation is particularly contentious.

If it become legislation, the subsidy would bolster the country’s position in the marketplace and help it compete with popular filming locations like Australia, Britain, Canada and Hungary. President Trump offered his support last month, calling on Republicans and Democrats to work together to write and approve legislation that would keep jobs in the country. “What we watch on the Silver Screen should be made in what was once the Movie and Motion Picture Capital of the World,” he wrote on social media. “Let’s get this done!”

More than 60 countries have lucrative tax credit programs drawing productions away from the United States. Los Angeles has been hit particularly hard by the exodus, with jobs drying up in the wake of the Covid-19 pandemic and the strikes by writers and actors in 2023. Representative Laura Friedman, a Democrat who represents Hollywood in Congress, said at a recent news conference that a federal program would go far beyond helping Los Angeles. “The United States, as a nation, has nothing to compete right now at a federal level,” she said.

The bill outlines a 20 percent transferable tax credit for wages that could be stacked atop a state incentive. The Senate bill will be sponsored by Senators Tim Scott, Republican of South Carolina, and Adam B. Schiff, Democrat of California. A companion bill is being brought forward in the House by Representatives Nathaniel Moran, Republican of Texas, and Linda T. Sánchez, Democrat of California.