Congress Moves Toward 20% Federal Film Tax Credit With Presidential Backing

Members of Congress have begun drafting legislation to create a 20% federal tax incentive for film and television production, a move that could yield credits as high as 30% through additional bonuses. The initiative follows explicit support from President Donald Trump last week, which sources say has helped galvanize Republican backing on Capitol Hill.

The bill is anticipated to be introduced this month, potentially as early as next week. It is being developed by Rep. Nathaniel Moran, a Republican from East Texas, and Rep. Linda Sanchez, a Democrat from Whittier, California. Both members serve on the House Ways and Means Committee, which holds jurisdiction over tax legislation. Rep. Laura Friedman, a Democrat from Burbank, is also collaborating on the bipartisan effort with Rep. Brian Jack, a Republican representing districts in the Atlanta suburbs.

For the past year, the Motion Picture Association and various entertainment unions have lobbied for a federal incentive capable of competing with generous subsidies offered by nations such as the United Kingdom, Canada, and Australia. Trump signaled his support via a Truth Social post on August 31, a development considered critical to unlocking votes across the aisle.

According to sources familiar with the process, the draft legislation aligns closely with the MPA’s proposals. It would provide a base credit of 20% against all labor costs, encompassing both above-the-line and below-the-line expenses. Eligible projects would include films, scripted television, animation, and reality TV, though news and sports broadcasts would be excluded.

To broaden political appeal, the bill includes four specific “uplifts” that allow producers to claim an additional five percent credit for meeting certain criteria. These conditions include filming in a rural opportunity zone, producing as an independent entity, bringing production back to the United States from abroad, or spending at least $10 million across 10 different states within a single year. Producers may combine up to two of these uplifts, capping the total federal credit at 30%.

Because the federal tax credit would stack on top of existing state incentives, total subsidies could exceed 60% depending on the production location. Supporters argue that the measure will benefit not only traditional hubs like Los Angeles and New York but also rural areas that currently lack significant filming activity or state-level tax incentives.

Friedman noted that discussions gained significant momentum after Trump’s involvement, resulting in a surge of outreach from individuals offering assistance. She expressed optimism about passing the measure during the post-election lame duck session, though acknowledged it may advance next year. The legislation has yet to receive a score from the Joint Committee on Taxation, but it is expected to carry a price tag in the billions.

While the current draft does not include a proposed bonus for productions in areas recently declared federal disaster zones—a provision California lawmakers had advocated for given the impact of the 2025 Los Angeles fires—it remains a pivotal step toward establishing a permanent federal framework for the entertainment industry.