The 60% test decides eligibility
Before any rate applies, Pennsylvania production expenses have to be at least 60% of the film's total production expenses. The guidelines work it out with pre-production, production, and post counted together: a $100,000 film with $60,000 spent in Pennsylvania passes; $59,000 doesn't. Post done in Pennsylvania counts toward the 60% even at a facility that isn't a Qualified Post-production Facility, but it earns 25% instead of 30%.
Then the credit is 25% of qualified Pennsylvania production expenses. It is a transferable tax credit: use it against Pennsylvania tax in the year issued and carry it forward up to three more years, or sell or assign it with DCED approval during that same window.
What qualifies and what doesn't
Qualified expenses are Pennsylvania production costs: wages and salaries subject to Pennsylvania withholding, and goods, services, and rentals from Pennsylvania residents or entities taxable in the state. Excluded:
- Development, financing, marketing, and advertising
- Costs of selling or transferring the credit
- Deferred, leveraged, or profit participation pay
- Principal actors' above-the-line payments beyond $15 million in aggregate
- Pass-through expenses from companies that don't normally rent or sell those goods
The 5% uplift is for a feature, TV film, or series intended for a national audience that meets DCED's minimum stage requirements at a Qualified Production Facility (QPF):
| PA production expense | Sets built at QPF | Days shot at QPF | Spend at QPF |
|---|---|---|---|
| Under $30,000,000 | At least 1 | At least 10 | At least $1,500,000 |
| $30,000,000 or more | At least 2 | At least 15 | At least $5,000,000 |
Worked example: $1,000,000 feature in Pittsburgh
Pre-production spend is $120,000, production $680,000, and post $200,000, for $1,000,000 total. In Pennsylvania: $90,000 of prep, $560,000 of production, and $50,000 of post at a local edit house, totaling $700,000. That's 70%, so the film is eligible.
- Credit: $700,000 x 25% = $175,000
- Application fee: waived, since the total budget is $1 million or less
Moving the other $150,000 of post to Pennsylvania wouldn't change eligibility here, but it would add $150,000 x 25% = $37,500, or $45,000 at a Qualified Post-production Facility.
Worked example: $5,000,000 feature with stage work
Pennsylvania expenses are $3,500,000 of the $5,000,000 total (70%).
- Standard credit: $3,500,000 x 25% = $875,000
- With QPF requirements met (one set built, 12 days, $1,600,000 spent at the facility): $3,500,000 x 30% = $1,050,000
- Application fee at 0.2% of the anticipated credit: $1,050,000 x 0.2% = $2,100 (maximum $10,000)
Applying
- Register the company to do business in Pennsylvania before principal photography (out-of-state companies file a Foreign Registration Statement).
- Apply on the Enterprise eGrants System no sooner than 90 days before principal photography in Pennsylvania.
- Show verifiable documentation that 70% of financing is secured and that the rest will be in place before photography.
- DCED reviews applications in four periods (July to September, October to December, January to March, April to June) and scores them on stage days at a QPF, Pennsylvania hires, days in PA hotels, PA spend against total budget, and use of studio resources.
- If approved, sign the contract and file monthly reports, then the final production and economic impact report, vendor list, and cast and crew form.
Section 1716-D of the Tax Reform Code caps awards at $100 million per fiscal year, with $5 million reserved for Pennsylvania film producers, and DCED can award some credits against future years. The guidelines say no single project receives more than 20% of the year's available credits. Productions shooting more than 12 months can ask for the credit to be issued annually.
Other Pennsylvania savings
Cast and crew staying 30 or more consecutive days in a Pennsylvania hotel don't pay the state hotel tax. State agencies can't charge a location fee for commercial filming on state-owned property beyond their actual costs.
Pennsylvania next to its neighbors
New Jersey pays 35% outside the New York City radius, and New York pays 30% with an extra 10% on labor upstate. Ohio pays a refundable 30% with only a $300,000 minimum. Check Maryland, Delaware, and West Virginia too, then compare on the incentives hub or in the incentive calculator. For what counts as qualified spend and how credits turn into cash, see how film tax credits work.
Storiara's budgeting feature splits costs into above the line, below the line, post, and other, so you'll regroup them into the pre-production, production, and post phases Pennsylvania's application asks you to break out.