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NC-415
Web General Information
12-10
This form is used to calculate the amount of income tax credit for qualifying expenses of a production company and should only be used
for taxable years beginning on or after January 1, 2011. The credit is calculated on all of the taxpayer’s qualifying expenses incurred in
this State in connection with a production, including expenses incurred in earlier years. The tax credit must be claimed in the taxable
year in which the production activities are completed. If more than one production is completed during a taxable year, a separate Form
NC-415 must be filed for each production. The information below does not cover all provisions of the law. For more information, go to the
Department’s website, www.dornc.com, and select “Tax Professionals”.
Eligibility. A production company that has qualifying expenses of Qualifying expenses for goods. Spending for goods
at least two hundred fifty thousand dollars ($250,000) with respect purchased or leased from North Carolina businesses
to a production is allowed a credit against income taxes equal to is eligible for the tax credit. This includes fuel, food,
twenty-five percent (25%) of the production company’s qualifying airline tickets and other goods if purchased or leased
expenses. from a business located in North Carolina.
Due date.To be eligible for the tax credit, the production company Qualifying expenses for services. Spending for
must file Form NC-415 with the Department of Revenue by the due services is eligible for the tax credit, regardless of
date of the income tax return for the taxable year in which the whether paid to residents or nonresidents, if the
production activities are completed. If the taxpayer is granted services are performed in North Carolina. The amount
an extension of time to file its income tax return, the due date for paid to an individual through a personal services
Form NC-415 will be extended to correspond with the extended corporation or an employee leasing organization
due date of the income tax return. Processing of the credit cannot is subject to the “highly compensated individual”
begin until after the income tax return for the taxable year in which limitations in calculating the allowable credit.
the production activities are completed is filed.
2. Compensation and wages on which withholding
Taxpayers must claim the income tax credit for qualifying expenses payments are remitted to the Department of Revenue.
on Form NC-415. Any tax liability for the tax year in which the tax Compensation and wages paid to employees for services
credit is claimed must be paid to the Department of Revenue before performed in North Carolina on which withholding
the tax credit can be processed. Important. A pass-through entity payments are remitted are eligible for the tax credit
that qualifies for this credit does not allocate the credit among its regardless of whether paid to residents or nonresidents.
owners as is the general rule for credits earned by pass-through The amount paid to an individual through a personal
entities. Instead, the pass-through entity is considered the taxpayer services corporation or an employee leasing organization
for purposes of claiming the credit. is subject to the “highly compensated individual” limitations
in calculating the allowable credit.
Limitations. The amount of tax credit allowed for a production that
is a feature film may not exceed twenty million dollars ($20,000,000). 3. The cost of production-related insurance coverage
There is no maximum credit for other types of productions. No credit obtained on the production. Expenses for insurance
is allowed for the following types of productions: coverage purchased from a related member are not
qualifying expenses.
Political advertisements.
4. Employee fringe contributions.
Television productions of a news program or live
sporting event. 5. Other expenses. Per diems, stipends, and living
allowances paid for work being performed in the State.
Productions that contain material that is obscene, as
defined in G.S. 14-190.1. Highly compensated individual - An individual who directly
or indirectly receives compensation in excess of one million
Radio productions. dollars ($1,000,000) for personal services with respect to a single
production. An individual receives compensation indirectly when
Substantiation. Taxpayers claiming this credit must maintain and a production company pays a personal service company or an
make available for inspection any information or records required employee leasing company that pays the individual.
by the Department of Revenue. The burden of proving eligibility
for the credit and the amount of credit rest upon the taxpayer. Production company - A person engaged in the business of making
The Department of Revenue may consult with the North Carolina original motion picture, television, or radio images for theatrical,
Film Office of the Department of Commerce and the regional film commercial, advertising, or educational purposes.
commissions to determine the amount of qualifying expenses.
Qualifying expenses subject to audit before credit is allowed. Feature film - A movie made for initial distribution in theaters that
is over 40 minutes long.
Definitions. The following definitions apply:
Live sporting event - A scheduled sporting competition, game,
Qualifying expenses - The sum of the following amounts spent in or race that is originated solely by an amateur, collegiate, or
this State by a production company in connection with a production, professional organization, institution, or association for live or tape-
less the amount in excess of one million dollars ($1,000,000) paid delayed television or satellite broadcast. A live sporting event does
to a highly compensated individual: not include commercial advertising, an episodic television series, a
television pilot, a music video, a motion picture, or a documentary
1. Goods and services leased or purchased. For goods production in which sporting events are presented through archived
with a purchase price of twenty-five thousand dollars historical footage or similar footage taken at least 30 days before
($25,000) or more, the amount included in qualifying it is used.
expenses is the purchase price less the fair market value
of the good at the time the production is completed. Related member - See G.S. 105-130.7A.
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