Bipartisan Bill Offers 20% Federal Tax Credit for U.S. Animation
A new bipartisan bill would give film and TV productions a 20% federal tax credit for U.S. wages, with up to 30% for some projects, requiring 75% of animation work done domestically.
A bipartisan bill introduced Thursday in Congress would create a federal tax credit covering 20% of eligible U.S. wages for film and television productions. Some projects could qualify for a credit of up to 30%, and the credit could be combined with existing state incentives if the bill passes.
To qualify, at least 75% of a production's animation work—measured by cost—would need to be done in the United States. Qualifying work includes keyframe animation, in-between animation, and voice recording. The credit would apply to feature films, TV pilots, and TV seasons costing more than $1 million, and contractors' work could count toward the credit.
The bill also includes separate provisions for U.S. visual effects and post-production work. It has support from lawmakers in both parties, studios, and entertainment unions, according to Cartoon Brew.
Disney, Pixar, and DreamWorks animated features have received a substantial share of California's recent studio tax credits. Disney's Hexed, a beneficiary of California's local incentives, would qualify for the new federal program.
Congress must pass the bill before any production can claim the credit.
Quick answers
What percentage of U.S. wages would the federal tax credit cover?
The bill would cover 20% of eligible U.S. wages for film and TV productions, with some projects qualifying for up to 30%.
How much animation work must be done in the U.S. to qualify?
At least 75% of a production's animation work, measured by cost, would need to be done in the U.S.
Which projects would be eligible for the credit?
Feature films, TV pilots, and TV seasons costing more than $1 million, with qualifying work including keyframe animation, in-between animation, and voice recording.