Film & TV Tax Credit Program 2.0
Tax Credit Program 2.0
Approved Applicant Essentials
All applicants must participate in career based learning and training programs approved by the CFC. To meet this requirement, applicants may choose a method of participation from the list below.
A. PAID INTERNSHIP
- Provide to students enrolled in a California high school or California community college 3 paid internship positions for a minimum of 75 hours each or a combination of internships with a minimum of 75 hours per student and a minimum 225 hours in total. Internship experience should include working with professionals in the film industry and hands-on work assignments. Note: Interns must be 18 years of age or older. Any productions utilizing interns in technical craft positions need to notify the applicable union representative prior to the start of the internship.
B. FACULTY EXTERNSHIP
- Provide a minimum of eight (8) hours for educators and/or faculty to observe the set operations, postproduction and other specialized departments.
C. STUDIO EMPLOYMENT AND PROFESSIONAL SKILLS TOUR
- Provide to students, enrolled in a California high school or a California community college, a minimum of eight (8) hours of a professional skills tour, which may include a set visit and/or studio or production company department(s) exposure.
D. CLASSROOM WORKSHOP
- Provide students enrolled in a California high school or California community college a minimum of eight (8) hours of classroom workshops or demonstrations on aspects of the film industry, conducted by entertainment industry professionals.
E. FINANCIAL CONTRIBUTION
- Make a financial contribution to California Department of Education (CDE) or California Community Colleges (CCC). Financial contribution based on .25% of the estimated tax credit reservation, with a minimum of $5,000 and a maximum of $12,000 (more may be contributed, if desired).
- For projects in year 1 of Program 2.0, the minimum financial contributions are: Independent productions: $3,000 / Nonindependent productions: $5,000
- For those applicants making a financial contribution to the Community Colleges, the contribution is made to the Foundation for California Community Colleges; write on the check “Non-Profit Internship Fund” in the notes line or “Career Readiness Program” in the notes line for funds for the high schools. Please request a receipt and submit it, along with the form, for verification of the contribution. Contact and mailing address is on the community colleges website or call (916) 491-4499.
- California Community College (CCC) Donation: W-9 for Community Colleges Contribution
- For those applicants making a financial contribution to CA high schools, write on the check “Career Readiness Program” in the notes. Please request a receipt and submit it, along with the form, for verification of the contribution.
- California Department of Education (CDE) Donation: W-9 for California Department of Education
F. WORKFORCE AND ALTERNATIVE SCHOOLS
- The CFC has partnered with a number of workforce and specialty schools. Applicants interested in working with any of the programs below should contact the CFC.
- Bay Area Video Coalition https://www.bavc.org/
- Fashion Institute of Design LA (Associate Program) http://fidm.edu
- Ghetto Film School https://www.ghettofilm.org/
- Hire LA’s Youth http://www.hirelayouth.com/intro.html
- Manifest Works http://www.manifestworks.org/
- New York Film Academy (Associate Program) https://www.nyfa.edu/
- Streetlights http://www.streetlights.org/
CHOOSING AN OPTION
- Discuss options with CFC – Contact Nancy Rae Stone and Brenda Blair.
- Project contact will be given options and referrals. Below please find links to the two Career Readiness sites, which will include examples on ways to fulfill the requirement.
Forms and Templates
Documentation will be reviewed by the California Film Commission and the CPA performing the Agreed Upon Procedures. For a listing of all required final documentation, please visit the Checklists page.
LOCAL COMMUNITY EXPENDITURE REPORT
Applicants shall report an estimate of local expenditures and wages for each county (excluding L.A. county) where filming occurs. Applicants are requested to fill out one form for each county where production filmed and where local expenditures exceed $100,000.
VENDOR VERIFICATION REPORTS
Each production must obtain documentation from its post-production facility to verify the date when final element was created. The process of post-production is considered complete when a final composite answer print, air master or digital cinema files is/are produced. For a TV series, the verification form should refer to the final episode of the season.
Each production must obtain documentation from visual effects, digital effects, post sound and/or title design companies or contractors to verify all work was performed in California. If a portion of the work was performed out of state by the company or its subcontractors, the form must only indicate the dollar amount for work incurred and materials utilized in the state.
PROGRAM 2.0 EXPENDITURE SUMMARY REPORTS
Program Year 1 – The form below is required as part of Phase IV – Request for Tax Credit Certificate – for approved applicants with Credit Allocation Letters issued prior to July 1, 2016.
Program Years 2 to 5 – The form below is required as part of Phase IV – Request for Tax Credit Certificate – for approved applicants with Credit Allocation Letters issued after July 1, 2016.
Interim Documents Checklist
Please carefully review guidelines regarding these requirements. The following documents must be submitted by email to the CFC Incentives Program. Queue number and project title must be included in the subject line.
- Production Updates – Email the CFC Incentives Program with project title and queue number in the subject line and provide any substantive changes: e.g., start date change, title change, revised # of episodes scheduled (if applicable), significant reduction of budget, or schedule.
- Orientation Meeting for Line Producer, UPM, Accountant, Post-Production Supervisor, Production Company Executive (min. of 2 representatives) no later than 4 weeks prior to start of Principal Photography
DURING PRODUCTION and/or POST PRODUCTION
- Call Sheet on Day One of Principal Photography – PDF via email to the CFC Incentives Program. “Principal photography” in California must commence no later than 180 days after the Credit Allocation Letter is issued.
- If a hiatus is requested, production must submit dailies, call sheet and production report for the first day shoot. If a production implements a “Hiatus” during the principal photography period, any and all hiatus period(s) may be no longer than 120 calendar days in aggregate for the entire duration of the production.
- Final Approved Production Reports (on a weekly basis) – PDF via email to the CFC Incentives Program.
- Career Readiness Requirement – All applicants must participate in a career based learning and training program approved by the CFC. Please refer to the Career Readiness section on the CFC website for detailed instructions on this requirement.
Agreed Upon Procedures Report – Audit Procedures
An Agreed Upon Procedures Report (AUP) must be performed by a Certified Public Accountant (CPA) who meets specific qualifications. Only CPAs who have attended a CPA Orientation Seminar 2.0 are able to conduct AUPs. Applicants are unable to engage the same CPA/Accountant who performed any production accounting and/or post-production accounting for the approved project.
NOTE TO APPROVED APPLICANTS
- An Agreed Upon Procedures Report (AUP) must be performed by a Certified Public Accountant (CPA) who meets specific legal qualifications and has attended the CFC’s orientation seminar for Program 2.0.
- There is no competitive process with respect to CPAs who may perform Agreed Upon Procedures for CFC tax credit program companies.
- Applicants are advised to discuss with prospective CPAs the firm’s experience and volume of audits performed in the past for the California Film and Television Tax Credit Program.
- Approved Applicants may not engage the same accounting firm and/or CPA who performed any production accounting and/or post-production accounting for the approved project.
- The CFC does not endorse nor recommend any of the companies listed and makes no claims as to the type or quality of service these companies provide; the listing below is provided as a courtesy to our applicants.
- Approved Applicants shall select from the CFC list a CPA who has met the legal qualifications and attended a CPA Orientation Seminar 2.0.
- Applicants shall email the Tax Credit Program at CFC Incentive Program and inform the CFC to change the project’s online portal status to Phase 4 once the CPA initiates the audit process.
- AUPs and all final documentation must be submitted in the format specified on the Final Documentation Checklist. Paper copies must be submitted in a soft cover press binder with labeled tabs.
NOTE TO CPAs
- Certified Public Accountants must meet the following requirements to perform Agreed Upon Procedures for Program 2.0: Active California license to perform attest services or proof of valid out of state accounting firm registration for the firm practicing attest services; current peer review of “pass”; attendance at a Program 2.0 CPA Orientation Meeting. CPAs who meet these requirements may request Agreed Upon Procedures documents, exhibits and appendices by emailing the CFC Incentive Program.
- When requesting AUP materials, please specify the fiscal year of the Credit Allocation Letter issuance, as there are different sets of AUPs and attachments for projects with Credit Allocation Letters prior to July 1, 2016 and on or after July 1, 2016. The AUP for F/Y 2016/17, which begins July 1, 2016, is currently under review and will not be available until April 2016.
- AUPs and all final documentation must be submitted in the format specified on the Final Documentation Checklist. CPAs must utilize the AUP format and include findings immediately after the stated procedure. Paper copies must be submitted in a soft cover press binder with labeled tabs. Do not submit AUPs until all final documentation requirements are complete.
- CPAs engaged to perform an AUP will need to access all program documents on the applicant’s portal. The CPA must first set up an account at the Online Application Portal, after which the CPA should inform the client to add the CPA as a user to the their portal account. Once added as a user, the CPA can access the application, and all uploaded files, including the Exhibit B – Jobs Ratio Calculator.
- The CFC conducted a CPA Orientation Meeting for Program 2.0 in February of 2016 and will not be holding another CPA Orientation Meeting for Program 2.0 until further notice.
- Tax Credit Certificates will not be issued until July 1, 2016.
All files must be submitted during Phase 4 of the application process. Please carefully review guidelines regarding these requirements.
All documents listed below are required and must be saved in a USB flashdrive (NO CDs). Paper copies must be placed in a soft cover binder with a press mechanism, sections labeled with tabs. Packet, along with USB, must be mailed to the CFC.
- Expenditure Summary Report – Paper copy and electronic PDF file.
- Certificate of Copyright Registration of the screenplay, pilot, television series, mini-series or television movie – Paper copy and electronic PDF file.
- Final Cast, Crew, and Vendor Lists – Electronic PDF files.
- Main and end title final “checker” or credit roll – Microsoft Word, PDF file, or QuickTime or similar electronic format.
- End Credit Acknowledgement – “The State of California and The California Film Commission.”
- End Credit Acknowledgement – CFC Logo (Request digital file from CFC).
- 5 Production Stills, with cast approvals cleared for CFC usage – JPG files.
- Local Community Expenditure Report, if overnight location occurs outside Los Angeles County – Paper copy and electronic PDF file.
- Copy of Script Supervisor’s Lined Script of the project; TV series must submit episodes 2 and 5 of the series – Electronic PDF file.
- Career Readiness Verification Form signed by designated representative, verifying participation in a career-based learning and training program; financial contributions require proof of payment – Paper copy of the form with wet signature and electronic PDF file.
- New Television Series Only: Documentation verifying initial distribution – Electronic PDF file.
- MOW Only: Documentation evidencing initial distribution on television, broadcast in one part – Electronic PDF file.
- Miniseries Only: Documentation evidencing initial distribution on television of 2 or more episodes and a total running time of at least 150 program minutes – Electronic PDF file.
- Agreed Upon Procedures (AUP) Report, including Exhibit A1, A2, or A3 and Exhibit B, prepared by eligible CPA firm – Paper copy and electronic file.
- Final Element Creation Letter evidencing the date final element was completed; vendor to utilize form template, print on vendor’s letterhead – Paper copy on letterhead with wet signature and electronic PDF file.
- Verification of in-state work for visual effects, titles, post-sound, digital effects; vendor to utilize form template, print on vendor’s letterhead – Paper copy of the letterhead with wet signature and electronic PDF file.
- Related Party Disclosure List – Electronic PDF file.
- Asset List comprised of digital, office, post production, or effects equipment – Electronic PDF file.
- Listing of Assets over $10,000 – Electronic PDF file.
- Payroll representative letter on letterhead or email verifying no outstanding invoices.
- Verification Letter from Applicant (if applicable) regarding points listed below (may be included in rep letter).
- Verification that all related parties have been disclosed on related parties listing
- Verification that all insurance claims related to Qualified Expenditures have been credited in cost report
Revised and/or updated information, as applicable, to the documentation that was previously submitted during the Application process (described and listed below) – Electronic PDF files.
Detailed Narrative Statement
- Provide a written statement on letterhead which describes the extent to which the credit is expected to influence or affect choice of filming location with respect to financial and business considerations. These may include hiring, and/or salary decisions, and should state to what degree the tax credit effects decision making with respect to choice of location.
– If revised, save PDF file in USB; if there are no changes, state on letterhead “No changes on previously submitted narrative statement.”
For applicants that are a partnership or single member LLC that is disregarded pursuant to Section 23038 and that are not more than 25% owned by a publicly traded company provide:
- Financial information, if available, including but not limited to the most recently produced balance sheets, annual statements of profits and losses, audited or unaudited financial statements, summary budget projections or results. This information is not subject to public disclosure.
– If available, save PDF file in USB; if not available, state on letterhead “Not Available.”
- The names of all partners in a partnership or names of all members of a limited liability company (classified as a partnership not publicly traded for California income tax purposes). This information is not subject to public disclosure.
– List names of members on letterhead, save PDF file in USB.
For applicants that are publicly traded companies or affiliates of publicly traded companies provide:
- A listing of all members of the applicant’s most recently filed California combined reporting group and any members to which the credit is assigned.
– If available, save PDF file in USB; if document listing is already on file with CFC within the past, fiscal year, indicate which project it was previously submitted for.
- If readily available, a listing of all the states, provinces or other jurisdictions in which any of those members finance motion picture productions.
– Electronic PDF file in USB.
Failure to provide the requested documentation may result in loss of the credit