Massachusetts Film Tax Credit

How the Massachusetts Film Tax Credit Works

Massachusetts offers one of the most straightforward and producer-friendly film incentive programs in the country. The program provides a 25% production expense credit on qualifying Massachusetts production costs and a separate 25% payroll credit on qualifying Massachusetts payroll. There is no annual program cap, no per-project cap, and the credits are fully transferable and partially refundable, giving productions multiple options for monetizing the credit value.

The Massachusetts film tax credit is administered by the Massachusetts Film Office under the authority of Chapter 63, Section 38X of the Massachusetts General Laws. Applications are reviewed by the Department of Revenue, which issues credit certificates after verifying qualified expenditures through an audit process.

Massachusetts does not impose a residency requirement on the payroll credit. Non-resident cast and crew earning wages for work performed in Massachusetts qualify for the payroll credit, making it possible to capture credit value on the full crew payroll regardless of where individuals are based.

Two Credit Components: Production Expense and Payroll

The Massachusetts program is structured as two separate but complementary credits that together provide a comprehensive incentive on Massachusetts production spending:

Production Expense Credit (25%)

The production expense credit equals 25% of the production company's total qualifying Massachusetts production expenses. Qualifying expenses include costs for goods and services purchased from Massachusetts vendors, location fees, equipment rentals, set construction, post-production services, and other costs directly associated with the production incurred in-state.

To qualify for the production expense credit, the production company must incur total Massachusetts production expenses of at least $50,000 in a consecutive 12-month period AND meet one of two additional threshold tests:

• The production's total Massachusetts expenses exceed 75% of its total production expenses worldwide, OR

• At least 75% of the total days spent filming the motion picture take place in Massachusetts

The 75% test is a significant threshold. Productions that primarily film in Massachusetts but have international locations, studio work in other states, or substantial post-production outside the Commonwealth need to evaluate whether they meet this test before committing to a Massachusetts application.

Payroll Credit (25%)

The payroll credit equals 25% of the production company's total qualifying Massachusetts payroll for employees connected with the filming and production of the motion picture in Massachusetts. Qualifying payroll includes wages paid to any employee (resident or non-resident) for services physically performed in Massachusetts in connection with production.

The payroll credit has one important exclusion: any employee whose total payments in connection with the specific motion picture equal or exceed $1 million is excluded from the payroll credit calculation. This threshold prevents very high-paid above-the-line talent from inflating the payroll credit base. Below-the-line crew wages are typically well below this threshold and qualify in full.

Minimum Spend Requirement

The production expense credit requires total Massachusetts production expenses of at least $50,000. This is one of the lowest minimum spend thresholds of any state with an active production incentive program, making Massachusetts accessible to a wide range of production budgets including lower-budget independent films and shorter-form productions.

The $50,000 threshold is measured in a consecutive 12-month period, giving productions flexibility to attribute Massachusetts expenses across a reasonable production timeline rather than requiring the minimum to be reached within a single calendar year or fiscal year.

No Program Cap

Massachusetts imposes no annual cap on the total amount of film tax credits the state will issue, and no per-project cap on the credit amount any single production can receive. This uncapped structure means qualifying productions receive their full credit entitlement without competing for allocation slots or facing the risk that a program fund is exhausted before their application is processed.

The absence of a cap distinguishes Massachusetts from most competing states, including those with substantially higher nominal credit rates. A program with a 30% credit and a $50 million annual cap offers less certainty than a 25% program with no cap, particularly for larger productions or states where the cap is frequently oversubscribed.

Eligible Production Types

The Massachusetts film tax credit covers:

• Feature films (theatrical and streaming)

• Television series (all formats and platforms)

• Television pilots

• Made-for-TV movies

• Animated productions

• Documentary films

• Short films meeting the minimum spend threshold

Commercials, news programming, sports broadcasts, and productions primarily used for corporate training or institutional purposes are generally excluded. Productions must be intended for public distribution through theatrical, broadcast, or streaming channels.

Transferability and Sale of Credits

Massachusetts film tax credits are fully transferable. Productions that do not have Massachusetts tax liability can sell or assign their credits to any Massachusetts taxpayer. The secondary market for Massachusetts film tax credits is active, and credits typically trade at 90-95 cents on the dollar, among the highest transfer rates of any state's film credit market.

Productions can also apply for a cash refund from the Massachusetts Department of Revenue for up to 90% of the unused credit amount that exceeds the production company's Massachusetts tax liability. This refundability provision means productions can recover up to 90% of their excess credit as cash (at the 25% credit rate, this represents effectively 22.5 cents on every qualifying dollar) without needing to find a credit buyer.

How to Apply for the Massachusetts Film Tax Credit

The application process is managed through the Massachusetts Film Office and the Department of Revenue:

1. Pre-production consultation: Contact the Massachusetts Film Office during pre-production to discuss the project, confirm eligibility, and understand current documentation requirements. The Film Office provides production support including location assistance and permits.

2. Withholding compliance: Production companies must withhold Massachusetts personal income tax on payments to loan-out companies and independent contractors for their wages to qualify for the payroll credit. Failure to withhold disqualifies those payments from the credit base. Establish proper withholding procedures from the first payroll run in Massachusetts.

3. Record-keeping during production: Maintain detailed records of all Massachusetts expenditures, vendor receipts, payroll records, and documentation of the filming location breakdown (Massachusetts versus non-Massachusetts shooting days).

4. Post-production application: Submit a credit application to the Department of Revenue after production concludes. The application includes a cost report documenting all Massachusetts qualified expenditures and payroll, along with supporting documentation.

5. DOR review and certificate: The Department of Revenue reviews the application, may conduct an audit of supporting documentation, and issues a credit certificate specifying the approved credit amount. The review process varies in duration based on application volume.

6. Credit use, transfer, or refund: Apply the credit certificate against Massachusetts tax liability, sell or transfer it to a Massachusetts taxpayer, or apply for the refund up to 90% of unused credit.

Massachusetts Production Infrastructure

Massachusetts has a well-established production ecosystem anchored by the Boston metro area and supported by locations throughout the state. New England Studios in Devens provides sound stage facilities, and numerous university-affiliated studios and production spaces are available in Greater Boston. The state's film commission maintains active relationships with location owners, vendors, and production support services statewide.

Boston's architectural and geographic diversity makes it a versatile production location. Productions can access colonial-era street scenes, major urban environments, harbor and waterfront settings, academic campuses, suburban neighborhoods, and rural New England environments within a relatively compact geographic area. Cape Cod, the Pioneer Valley, and the Berkshires provide additional distinct environments accessible within two to three hours of Boston.

The local below-the-line crew base, while smaller than New York or Los Angeles, has grown substantially over two decades of incentive-driven production. Major productions have filmed in Massachusetts regularly, including studio features, prestige television, and major streaming series, building a trained local crew community experienced with large-scale production needs.

2025-2026 Program Status

The Massachusetts film tax credit program continues operating without caps or sunset threats as of 2026. The Legislature has maintained the program consistently, and the Department of Revenue continues issuing credit certificates for qualifying productions. No significant legislative changes affecting the credit rate, cap structure, or eligibility requirements were enacted in 2025 or are anticipated for the 2026 production year.

Productions planning Massachusetts shoots for 2026 and 2027 can plan with confidence that the 25% uncapped program will remain available. The Massachusetts Film Office provides current program guidance and pre-production support at mafilm.org.

Massachusetts Film Tax Credit: Key Facts at a Glance

• Program name: Massachusetts Film Incentive Tax Credit

• Administering agencies: Massachusetts Film Office / Department of Revenue

• Production expense credit: 25% of qualifying Massachusetts production expenses

• Payroll credit: 25% of qualifying Massachusetts payroll (per-person cap: $1 million)

• Annual cap: None

• Per-project cap: None

• Minimum spend: $50,000 in Massachusetts production expenses (plus 75% test)

• Credit type: Transferable; up to 90% refundable

• No residency requirement on payroll credit

• Eligible types: Features, TV series, animation, documentaries, shorts