The credit comes from Section 3050.01 of Act 60-2019, the Puerto Rico Incentives Code, and it is issued under a decree from the Department of Economic Development and Commerce (DDEC). The Puerto Rico Film Commission runs intake and review. Everything about how it works in practice changed on July 1, 2026, when DDEC's Circular Letter 2026-003 took effect, so producers who looked at Puerto Rico a year or two ago should start over with the current rules.
The $38 million bottleneck
On paper the annual limit is $100 million. Act 5-2023 wrote that number into Section 3050.01. In a footnote to the April 2026 circular, DDEC says the Fiscal Oversight Board still hasn't authorized the higher figure, so the money actually available is $38 million per fiscal year.
Demand is far above that. The same circular reports that as of December 31, 2025 the Film Commission had about 67 decree applications filed between 2020 and 2025, asking for $170,378,834.96 in credits against the $38 million limit. DDEC's response was to archive every film decree application that hadn't been approved by July 1, 2026. Projects that hadn't started shooting can refile under the new rules. Any project that started principal photography without a decree is disqualified from this cycle and every future one.
The circular also narrows who can get credits at all. For now, Section 3050.01 credits are reserved for feature films, documentaries, and episodic series. Live streamed shows are held to a $200,000 yearly pool, capped at $50,000 per show, and TV programs such as talk, game, and variety shows get $300,000 a year, capped at $100,000 each. Film festivals moved from credits to cash grants of up to $25,000. At least 10% of the credits have to go to local productions and documentaries.
Rates and the split between local and nonresident money
| Payment | Credit rate | Notes |
|---|---|---|
| Puerto Rico residents and local companies | Up to 40% | Above and below the line both count |
| Nonresident individuals (foreign persons) | Up to 20% | 20% Puerto Rico withholding applies |
| Domestic producer bonus | Up to 15% more | Features, series, docs with local key creatives; $4,000,000 credit cap |
| Producer fees | Counted at the rates above | Only up to 10% of Puerto Rico production expenses, paid to resident producers |
Credits on payments to domestic persons can never exceed 55% of your Puerto Rico production expenditures, which is exactly 40% plus the 15% bonus. Your qualified spend also excludes municipal and state taxes, and financing costs only count from the date the decree is signed.
A $1,000,000 feature shot in San Juan
Say the production accountant projects $700,000 of Puerto Rico production expenditures on a $1,000,000 budget:
- Local crew, local cast, island vendors, stages, and hotels: $550,000
- Nonresident lead actor and DP, paid in Puerto Rico: $150,000
- Post, music, and insurance booked off the island: $300,000 (no credit)
The credit:
- 40% x $550,000 = $220,000
- 20% x $150,000 = $30,000
- Total: $250,000
Before the decree takes effect you pay a filing fee of 1% of Puerto Rico production expenses, here $7,000 (the fee tops out at $250,000). If the producer is domestic and the director or line producer is a Puerto Rico resident, the 15% bonus adds $82,500 on the $550,000 local spend, which brings local credits to exactly the 55% ceiling.
From application to certificate
- File on the DDEC Incentives Portal with the qualification package: chain of title or a production services agreement, a finance plan with letters of intent and proof of funds, a sales or distribution contract with a minimum guarantee, and cast letters with dates. Features with a Puerto Rico budget of $10 million or more also need a completion bond.
- If approved, you get a Decree of Tax Credits. Pay the first half of the filing fee within 30 working days, with a notarized acceptance.
- Start principal photography within 120 days of the decree.
- Within 90 days of wrap, a Puerto Rico CPA files an agreed upon procedures report. Payroll must be backed by W-2PR forms and Hacienda Form 480 filings.
- DDEC issues the Certification of Tax Credits within 30 days of the report. The code allows half the credit once a bond is posted or half the spend is certified, and the balance when all spend is certified.
The credits are nonrefundable. Section 3000.01 lets you assign or sell them without a taxable event, and that sale is how a mainland production turns the certificate into money.
Where Puerto Rico sits against the alternatives
Puerto Rico has no neighboring state, so the useful comparisons are other islands and the mainland Southeast. The Dominican Republic is the nearest country page we cover. Florida has no statewide program, and Georgia is the usual mainland benchmark. Put your own local and nonresident split into the incentive calculator, and read how film tax credits work if selling a transferable tax credit is new to you. Every jurisdiction we cover is on the incentives hub.
The Funding page in Storiara, which sits next to budgeting, matches incentive programs to the locations, shoot days, and budget in your project and can apply an estimate to the budget. That estimate uses a flat share of the budget and ignores caps and rate splits like the 40/20 one here, so treat it as a first pass and check it against the numbers on this page.