Patti Kahn - accounting for the film tax credit

by Chris Aliapoulios

Proper accounting for film projects is essential to receiving Michigan’s film tax credit, but it has been a challenge for some projects according to Patti Kahn CPA, of Kahn & Company, PLC, Certified Public Accountants, who specialize in auditing film projects. Rules are very specific and differ from state to state. In order to receive the largest benefit from the Michigan incentive, understanding how to account for project spending is vital.

Patti Kahn has been specializing in the nuances of film accounting and took some time out of her busy tax season to explain some key considerations in accounting for film projects:

Review the tax incentives early to maximize potential benefits and define constraints necessary to assure spending can be certified.
Adhere to payroll tax guidelines. You need to withhold as you pay wages to avoid tax penalties, rebate delays, and potential loss of the incentive. Michigan payroll tax withholding is required with independent contractors and corporate entities.
Complete the postproduction audit required to state certify.
File Michigan and Federal Tax returns.