The California income tax credit for film and television production has been significantly expanded. The funding allocated for such credits has been increased from $100 million to $330 million for each fiscal year. Eligibility for the credit has also been expanded to include big-budget feature films, one-hour TV series episodes and TV pilots. Previous budget caps for studio and independent films have been eliminated.

Credits were previously assigned through a lottery system. Under the new program, projects will be ranked and credit allocations will be received by the highest ranked projects. The principal criteria in the ranking system will involve the projection of “jobs ratio” formula. Under the new system, credits will also be allocated multiple times in each year instead of just once annually.

The first credit application period for non-independent television projects only will be May 11 – 17, 2015. Non-independent projects are productions undertaken by a publicly traded company or a subsidiary of a publicly traded company. There will be $55.2 million in tax credits available for new television series, television pilots, movies of the week, and miniseries. Credits of $27.6 million will be available for relocating the production of a television series to California. Credits will be allocated after July 1, 2015, and principal photography may not begin prior to receiving a credit allocation.

From July 13–25, 2015, application may be made for credits for the production of feature films and all independently produced projects. $48.3 million will be available in credits for feature films and $6.9 million will be available for independent projects. Credit allocations will be issued after August 3, 2015, and principal photography may not begin prior to receiving a credit allocation.

The basic requirement to be eligible for any credit is that 75% of the principal photography days must be entirely within California or the production must spend 75% of its total budget in California. Additionally, principal photography cannot begin prior to receiving a credit allocation.

Non-independent productions receive a 20% credit. Non-independent feature films must have a $1 million minimum budget and, while there is no maximum budget, the credit allocation applies only to the first $100 million in qualified expenditures. Movies of the week and miniseries must have a $500,000 minimum budget. New television series must have a $1 million minimum budget for each episode and each episode must have 40 minutes or more of running time, excluding commercials.

There are two types of productions that qualify for a 25% tax credit. A television series, without regard to episode length, that filmed its most recent season outside of California may receive a 25% credit in the first year that the filming is moved to California. After the first year the credit is reduced to 20%. A minimum budget of $1 million per episode is required. Certain independent films having at least a $1 million minimum budget also may qualify for the 25% credit.

The 20% credit may be increased to 25% in some cases. Filming within the state of California but outside of the Los Angeles metropolitan area is one of the ways a production can qualify for the 5% credit increase. Having the music written and recorded in California, as well as the production of visual effects in California, can also lead to a 5% credit increase; however, the total credit cannot exceed 25%.