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NC-415

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General Information

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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, , 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

whether paid to residents or nonresidents, if the

date of the income tax return for the taxable year in which 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.

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).

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.



Employee fringe contributions.

Television productions of a news program or live



sporting event.

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

original motion picture, television, or radio images for theatrical,

The Department of Revenue may consult with the North Carolina

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

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.

Form Nc-415 - Tax Credit For Qualifying Expenses Of A Film Or Television Production Company Page 2

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