The California Film Commission demonstrates how to tag your Showbiz budget for the CA film tax incentive.
UPDATE: As a followup to our webinar on the California film tax incentive program 3.0, let’s take a moment to review just how to tag your budget to take full advantage of the California production incentive.
While there are some great new features to the film tax incentive program in California for 2020, this instructional video from the California Film Commission remains an excellent starting place. To get your film budget in shape for taking maximum advantage of the California incentives, watch the video below:
Now let’s break down some of the finer points of tax incentive budget tagging from the California Film Commission here.
What subgroups do I need in my budget for the California film tax credit?
The CFC makes great use of subgroups in Showbiz Budgeting for properly tagging your California film tax incentive items. Here are the four film budget subgroups to use for tracking the California incentive:
- Qualified Wages – the film commission suggests the subgroup QW
- Qualified Expenditures (Non-Wages) – here the suggested subgroup is QE
- Visual Effects – subgroup VU
- Non-Qualified Expenditures – subgroup NQ
Is there a suggested chart of accounts for the California film tax credit 3.0?
The subgroups above will make more sense in context if you review the downloadable chart of accounts for the California film tax credit program 3.0 from the CFC’s website. You’ll find some additional categories for your project’s budget there, including XX for production expenditures outside the state of California.
After setting up subgroups, CFC demo video goes on to demonstrate how to do the actual tagging of your film budget for the California incentive. This can be done either line-by-line or by highlighting several budget line items at once and applying a subgroup in bulk.
Per the CFC, this includes tagging Visual Effects budget line items as VU in addition to QW or QE, in order to calculate your JOBS ratio bonus points for the film tax incentive in California.
Speak to an entertainment payroll expert today to discuss budget tagging for the CA film tax incentive in more detail.