Q. How do I apply for a Film Tax Credit?
A. To be eligible for a Film Tax Credit at least 60% of your total production budget must be spent in Pennsylvania. Review the Applications & Forms section for step-by-step instructions on how to apply for a Film Tax Credit.
Q. What is the maximum amount of Film Tax Credits a project can receive in a Fiscal Year?
A. The PA Film Office will limit a Film Tax Credit award to an amount not greater than 20% of the aggregate amount of Film Tax Credits available in any fiscal year. Based on current allocation of $60 million, the maximum amount of Film Tax Credits to be awarded to a single project is $12 million per fiscal year, with the excess amount funded from the next fiscal year, providing availability of the Film Tax Credits.
Q. How are Film Tax Credit applications received, evaluated and awarded?
A. Applications are reviewed in the order received. Film Tax Credits are awarded to those projects that have met all of the application requirements. Refer to the 2014 Film Tax Credit Guidelines for further details. The PA Film Office is responsible for reviewing all the application materials. The PA Film Office will issue a Film Tax Credit Contract to those projects that have completed and complied with all the application requirements.
Q. What are Pennsylvania’s child labor laws?
A. The Pennsylvania Department of Labor and Industry is responsible for the monitoring and enforcement of child labor activity. If you are employing actors under the age of 18 years old in any type of project and you are paying any actors in your production (no matter their age), the project is subject to the Child Labor Laws of Pennsylvania. Contact Bob Kuzynski at the Bureau of Labor Law Compliance (412.565.5301) or the Pennsylvania Film Office for guidance.
Refer to the Child Labor law by clicking here.
Q. I have submitted my application, now what?
A. After you have submitted your application and all required materials, it will be reviewed by the Pennsylvania Film Office. If the application is approved (typically within 30 days of receipt) you will receive a Film Tax Credit Contract in the mail. The Film Tax Credit Contract will detail the amount of the award and the terms under which a Film Tax Credit will be issued. Acceptance of the Film Tax Credit Contract must be made by returning an original signed copy of the Film Tax Credit Contract to the Pennsylvania Film Office within 30 days of the date it is issued. Keep a copy for your files. Be sure to start filing Monthly Reports with the Pennsylvania Film Office once you have signed the award letter.
Q. Do employees have to be Pennsylvania residents in order for their salaries to be Qualified Pennsylvania Production Expenses?
A. No, the salaries qualify as long as their compensation is subject to Pennsylvania income tax.
Q. Must the production company open a bank account in Pennsylvania?
A. No, a production company does not need to open a bank account in Pennsylvania. All applications will be reviewed for completeness and compliance with the Act and these Guidelines. Applicants will be notified by email of missing information or non-compliance with the Guidelines. Applicants will have the opportunity to correct their application submissions; however, an application will not be placed in the funding queue until all required information is received by the PA Film Office. A complete application package will be reviewed and approved or disapproved within in a 90 day period: July 1st through September 30th; October 1st through December 31st; January 1st through March 31st and April 1st through June 30th.
Q. When do I receive my Film Tax Credit?
A. After you have completed your production (including post) you must submit the final Production and Economic Impact Report along with the Project Audit. Once approved, you will receive your Film Tax Credit certificate.
Q. My project was awarded a $100,000 Film Tax Credit; however, the final Film Tax Credit to be issued is less than $100,000, am I still required to do a Project Audit?
A. Yes. You must abide by the signed Film Tax Credit Contract that awarded a $100,000 Film Tax Credit regardless of the final Film Tax Credit to be issued.
Q. Are audit expenses Qualified Pennsylvania Production Expenses?
A. Yes, if they are included in the budget and the work is done in Pennsylvania.
Q. What can I do with a Film Tax Credit?
A. If you have a tax liability in Pennsylvania, you must first apply it to that. After you have filed your tax return, you may sell it or assign it.
Q. Must the production company use a Pennsylvania auditor?
A. No as long as the auditor is licensed in Pennsylvania.
Q. Is a production company required to withhold on payments to a pass-through entity as a condition of receiving the Film Tax Credit?
A. No. Article III of the Tax Reform Code of 1971, which governs withholding of Pennsylvania’s Personal Income Tax (PIT), does not require the production company to withhold and remit taxes on payments to a pass-through entity. Therefore, the Department (DCED) will not require a production company to withhold as a condition for receiving Film Tax Credits. However, we wish to reiterate that all of the pass-through entity’s individual partners, members, shareholders, employees and independent contractors who receive Pennsylvania source income are required by law to pay Pennsylvania PIT.