Lights, Camera, Credits: The Motion Picture, Television, and Entertainment Revitalization Act

Key Takeaways

• Federal film tax credit could change production economics. The proposed Motion Picture, Television, and Entertainment Revitalization Act would establish a 20%-30% federal tax credit on qualifying U.S. production compensation, creating potential savings for studios and production companies.
• Transferability could create new financing opportunities. Proposed credit-transfer provisions would allow eligible producers to monetize unused federal tax credits, potentially improving project liquidity and creating investment opportunities for corporate taxpayers.
• Production planning will determine financial benefits. Studios and independent producers should evaluate domestic production locations, ownership structures, and compensation records to assess eligibility for enhanced credits while monitoring the bill’s progress.

On September 24, 2026, a bipartisan group of House members introduced the Motion Picture, Television, and Entertainment Revitalization Act (H.R. 10582) (the “Act”). If enacted, the Act would give productions a federal income tax credit worth 20% to 30% of what they pay cast and crew for work done in the United States. There is no cap on the total credits available, and productions that cannot use their credits could sell them for cash.

The proposed legislation remains in early stages and subject to amendment, revision, or withdrawal as it moves through the legislative and political process.

Why Congress Is Proposing a Federal Film and Television Tax Credit

The bill has broad support. Rep. Nathaniel Moran (R-TX) introduced it, and it now has more than 20 cosponsors from both parties and across jurisdictions, including Reps. Linda Sánchez (D-CA), Brian Jack (R-GA), Andy Barr (R-KY), and Andrea Salinas (D-OR). Sens. Tim Scott (R-SC) and Adam Schiff (D-CA) are sponsoring a Senate companion bill.

The key policy reason for the legislative push is increasing competition from overseas production. More than 60 countries offer lucrative incentives and, in 2025, Los Angeles shoot days fell more than 16% with more filming activities occurring abroad. Rep. Friedman (D-CA) stated, “The United States, as a nation, has nothing to compete right now at a federal level.” Per some studies, the legislation is projected to support over 140,000 jobs annually and nearly $250 billion in economic activity between 2027 and 2035. The bill also aims to fill the gap left by IRC § 181 expensing, which expired at the end of 2025.

President Trump has endorsed, for now, the proposal on August 31, 2026. He stated, “What we watch on the Silver Screen should be made in what was once the Movie and Motion Picture Capital of the World . . . Let’s get this done!” SAG-AFTRA and the Motion Picture Association also support the proposal.

How the Proposed Federal Film Tax Credit Would Work

Although the legislation is still pending, and likely subject to change, the current language generally provides the following terms.

Which Film and Television Productions Would Qualify for the Federal Tax Credit?

Feature films, television pilots, and television seasons — at least four related episodes, treated as a single production — can qualify if they:

1. are made as a commercial business;
2. are completed during the tax year;
3. cost more than $1,000,000; and
4. shoot at least 75% of principal photography days in the U.S.

For animated projects, the 75% test looks at the cost of U.S. animation work instead of shoot days. Talk, game, awards, news, live sports, radio, gala, and daytime-drama programming, social-media content, and advertising, fundraising, and corporate/industrial productions are excluded.

What Production Compensation Would Qualify for the Tax Credit?

The credit is based on compensation paid or incurred, directly or indirectly, for qualifying services performed in the U.S. by actors, directors, producers, and production personnel, including contractors and pre- and post-production services.

How Producers Could Qualify for the Maximum 30% Federal Tax Credit

The legislation would provide for a 20% base rate, increased by five points each (capped at 30%) for certain “bonus” criteria such as:

1. at least 30% of principal photography days occur in a rural qualified opportunity zone or qualifying federally declared disaster areas;
2. an “independent producer” that is not, and is not majority-owned by, a publicly traded corporation;
3. “multi-State producers” meeting 50% photography and $10 million compensation thresholds in at least 10 states; and/or
4. increasing domestic production relative to a foreign base amount of film activities (based on specified percentage goals).

How Transferable Federal Film Tax Credits Could Generate Cash for Producers

Most notably, productions that cannot use the credit themselves could sell it for cash. The Act would do this by adding the film credit to the existing credit-transfer rules created by the Inflation Reduction Act (I.R.C. § 6418(f)(1)(A)). Under the existing I.R.C. § 6418 framework:

• An eligible taxpayer may elect to transfer all or a portion of the credit to an unrelated taxpayer (within the meaning of §§ 267(b) and 707(b)(1)) solely for cash.
• Cash paid is not includible in the transferor’s gross income and is not deductible by the transferee (§ 6418(b)); the transferee is treated as the taxpayer for the credit.
• A credit may be transferred only once (§ 6418(e)(2)); the election is made on a timely filed return and is irrevocable.

Transferees would still remain subject to general credit utilization limits (under I.R.C. § 38(c)), the rules for carrying unused credits back or forward (I.R.C. § 39)) and, for individuals, the passive activity rules (§ 469). Beyond these, the Act contains no transfer-specific floor or cap for the federal film tax credits.

What Studios, Producers, and Investors Should Do Now

Film and television producers and studios should carefully monitor the federal legislation, and the potential benefits resulting from a 20%-30% federal income tax credit on qualifying compensation for talent and crew.

Independent and multi-state producers likely stand to gain most from the Act, but they will be required to keep detailed and meticulous records relating to production activities, such as day counts and compensation by jurisdiction. Investors and credit buyers may also benefit from a new § 6418 market for transferrable credits to offset their own liabilities.