Federal Film Production Tax Credit
Bipartisan Lawmakers Draft Federal Tax Credit to Bring Film Production Back to U.S.
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Key Points
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The new Congressional American Film & TV Production Caucus includes six founding members: Reps. Brian Jack, Laura Friedman, Nathaniel Moran, Linda Sánchez, Nicole Malliotakis and Tom Suozzi. Several members sit on the Ways and Means Committee, which writes tax legislation, while Jack serves on the Rules Committee, which helps determine whether bills reach the House floor.
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The proposed federal credit is being analyzed on the assumption that it would take effect on Jan. 1, 2027, requiring Congress to pass the legislation by the end of 2026 for the study’s projections to apply.
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The proposed federal program would compete with more than 120 production tax breaks worldwide. IATSE president Matthew Loeb said the industry needs “a level playing field,” arguing that state incentives alone cannot prevent productions from leaving the United States.
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Texas’ incentive program requires productions to spend at least $1.5 million in eligible in-state costs and have at least 35% of paid cast and crew be Texas residents. The state program was funded at $300 million every two years for 10 years, for a potential total of $1.5 billion.
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The proposal was accelerated after Trump called for a federal incentive on Truth Social on Aug. 31, and producer Steven Paul said he wanted legislation enacted before the end of the year so productions planning future shoots could return to the United States.
Hollywood is fighting back against the flight of film and TV work overseas. Six bipartisan lawmakers have formed a new Congressional American Film & TV Production Caucus and are drafting legislation for a federal tax credit that could reshape the industry. The proposal offers a 20% credit on production labor costs, potentially reaching 30% with bonuses, stacked on top of existing state incentives Spectrum News 1.
The push comes as the U.S. has lost more than 100,000 production jobs since 2022 and domestic production spending has dropped 20% Yahoo News. An economic study projects the credit could add 143,500 annual jobs and boost America's share of global production from 39% to 65% by 2035, generating $249.1 billion in economic value Advanced Television.
The Bipartisan Coalition Behind the Push
Three Democrats and three Republicans are leading the charge. Reps. Brian Jack, Laura Friedman, Nathaniel Moran, Linda Sánchez, Nicole Malliotakis, and Tom Suozzi founded the caucus Yahoo News. Several sit on the Ways and Means Committee, which writes tax bills. Jack serves on the Rules Committee, which decides whether bills reach the House floor.
Why American Productions Are Leaving
Over 120 countries now offer production tax breaks, from the United Kingdom to Canada and Australia TheWrap. IATSE president Matthew Loeb said state incentives alone cannot keep productions home. The industry needs "a level playing field," he argued TheWrap. Without federal support, major studios continue relocating shoots abroad to chase bigger subsidies.
How the Federal Credit Would Work
The 20% transferable credit applies to eligible production labor. Bonuses could push it to 30%. The proposal assumes a January 1, 2027 start date, meaning Congress must pass it by end of 2026 Advanced Television. States like Texas could stack this federal credit with their own programs, which offer up to 31% incentives for productions spending $1.5 million in-state with 35% local hiring Spectrum News 1.
The Economic Forecast If Congress Acts
A study by Olsberg SPI, commissioned by the Motion Picture Association, projects massive gains. The credit could generate $249.1 billion in gross value added between 2027 and 2035 Advanced Television. It would create an average of 143,500 additional full-time entertainment jobs annually. U.S. global production share would jump from 39% to 65%, assuming the law passes and takes effect on time Spectrum News 1.
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