Film Production Activity Tax Credit

About this page. This page explains the Maryland Film Production Activity Tax Credit in plain language. The credit is authorized under Maryland Tax-General Article §10-730 and was amended by the DECADE Act of 2026 (HB 898 / SB 388), effective July 1, 2026. If anything on this page conflicts with the statute, the statute controls.

Program Status

The program is currently active.

The Maryland Film Office is accepting Applications for Qualification for FY 2027 (July 1, 2026 – June 30, 2027) tax credits on a first come, first served basis. The Department is limited to certifying $12 million in tax credits in FY 2027.

Important. Applications must be submitted BEFORE any work begins on the film production activity in Maryland. Costs incurred before the Application for Qualification is submitted are not eligible.

What This Program Does

The Film Production Activity Tax Credit provides a refundable Maryland income tax credit to film and television production entities for qualified direct costs of producing in Maryland.

Because the credit is refundable, a production entity that receives a credit larger than its Maryland income tax liability is eligible to receive a refund for the difference.

The program supports Maryland’s film and television industry by attracting feature films, television series, and small independent productions.

Who This Is For

The program has two separate tracks:

Standard Film Productions — feature films and television series with more than $250,000 in Maryland direct costs.
Maryland Small Films — Maryland-organized small productions with more than $25,000 in Maryland direct costs.

Each track has its own application forms, eligibility criteria, and final certification process. The table below shows the key differences.

	Standard Film Productions	Maryland Small Films
Credit rate	28% of authorized direct costs (feature films); 30% for television series	28% of authorized direct costs (feature films); 30% for television series
Maximum credit per project	$10,000,000	$125,000
Minimum direct costs in Maryland	More than $250,000	More than $25,000
Production entity requirements	Demonstrated financing; evidence of national distribution	Maryland-organized 3+ months; independently owned; not a subsidiary; not dominant in field; ≤25 full-time employees
Independent CPA audit required	Yes — Agreed Upon Procedures	Only if authorized direct costs exceed $250,000. Otherwise submit receipts and proof of payment.
Form for Additional Documentation	Required before principal photography	Not required

Definitions

Film production entity. A business entity carrying out a film production activity in Maryland.

Authorized direct costs. Eligible production expenses directly incurred in Maryland by the film production entity, paid to a qualified vendor, and pro-rated for time in Maryland. See the Authorized Direct Costs list - PDF - 307.66 KB, which is provided for guidance and may be changed by the Department at any time.

Qualified vendor. A vendor that (1) is qualified to do business in Maryland and, if applicable, is registered and in good standing with the Maryland Department of Assessments and Taxation; (2) maintains a physical location in Maryland from which its employees are based; (3) provides goods and services to the production entity that are part of the vendor’s historic ordinary course of business; and (4) generates those goods and services from its Maryland location, unless ordered online.

Completion date. The date on which the production entity expects to complete all Maryland production, or to complete the in-state production of the current season of an ongoing series. Costs incurred after the completion date cannot be included as direct costs.

Program Duration and Limits

Annual program cap

The Department may certify up to $12 million in tax credits in FY 2027 (July 1, 2026 – June 30, 2027). Credits are issued on a first-come, first-served basis until the cap is reached.

Per-project limits

Standard Film Productions: up to $10,000,000 per project
Maryland Small Films: up to $125,000 per project

Credit reserved by Letter of Qualification

The Letter of Qualification reserves the maximum credit amount based on the entity’s estimated total of authorized direct costs in Maryland. A production cannot receive more credit than the amount specified in the Letter of Qualification.

How the Program Works

The credit equals a percentage of the production entity’s authorized direct costs incurred in Maryland.

Credit rates and caps

Standard Film Productions

Feature films: up to 28% of authorized direct costs; maximum $10 million per project
Television series: up to 30% of authorized direct costs; maximum $10 million per project

Maryland Small Films

Feature films: up to 28% of authorized direct costs; maximum $125,000 per project
Television series: up to 30% of authorized direct costs; maximum $125,000 per project

Amending the initial application

Under the DECADE Act of 2026, a qualified film production entity may amend its initial application if an independent auditor verifies that the projected total budget of the film production activity has increased or decreased by 50% or more. The Secretary evaluates the amended application, determines whether the production continues to qualify, and notifies the Comptroller.

Note. This provision took effect July 1, 2026. Contact the Maryland Film Office for the current procedure for submitting an amended application.

What counts as an authorized direct cost

Direct costs must be incurred by the film production entity, provided by a qualified vendor, for time or use in Maryland only, and pro-rated for time spent in Maryland only.

Vendor rules

All goods and services must be provided by a qualified vendor (see Definitions above). This applies whether goods or services are bought or rented directly by the production company.
Goods or services that are specialized or technical and not reasonably available from a qualified vendor may be provided by a non-qualified vendor, but only with prior approval from the Department.
To request approval, submit a Due Diligence Form for Use of a Non-Qualified Vendor - PDF - 231.17 KB.

Compensation rules

Salaries, wages, and “other compensation” paid to any individual are subject to a $500,000 cap for the entire length of the production activity (prep, pre-production, principal, post) — not just time in Maryland.

Important. If any individual receives more than $500,000 in total compensation in connection with the production, NONE of that individual’s costs qualify — including “other compensation” such as employer fringes, per diems, housing allowances, travel allowances, meal allowances, car allowances, cell phone allowances, kit/box rentals, and relocation fees. The cap applies whether compensation is paid directly, through a payroll company, or through a loan-out or personal services corporation.

Location and pro-ration rules

Direct costs must be pro-rated based on the time personnel or materials are in Maryland and working or used in connection with the production.
Costs paid in a lump sum for activities both inside and outside Maryland must be pro-rated.
Filming in Washington, D.C., does not qualify as Maryland filming.
Only travel into Maryland is eligible. The endpoint of that leg of travel must be in Maryland. Round-trip fares into Maryland are divided in half.
Insurance premiums are eligible only for the portion allocable to time spent in Maryland.

Other rules and exclusions

Direct costs cannot include:

Costs associated with filming outside Maryland
Entertainment, gifts, or gratuities (or any costs coded as such)
Purchase of vehicles or other items for personal use
Costs recouped by an insurance policy
Taxes and fees paid to other jurisdictions, including the federal government
Penalties, fines, overages, or similar costs
Either a relocation fee OR a housing/living allowance — not both

Additional rules:

Costs must be reasonable and negotiated at arm’s length.
Direct costs may only be attributed to the production activity once.
Direct costs must be the net cost of goods or services. Security deposits must be netted out.
For materials or goods with an initial cost greater than $1,000, the direct cost equals the initial cost minus the resale or remaining value at the end of the production in Maryland.

Key Eligibility Requirements

Requirements for all applicants

Meet all statutory requirements under Maryland Tax-General Article §10-730
Submit a complete and signed Application for Qualification
Demonstrate financing for the production
Provide acceptable evidence of national distribution
At least 50% of principal photography must occur in Maryland
Principal photography must be scheduled to begin within 120 days of receiving the Letter of Qualification
Total authorized direct costs in Maryland must exceed $250,000 (or $25,000 for Maryland Small Films) by the conclusion of production

Important. The minimum cost threshold applies at the END of production, not just at application. A Standard production whose actual authorized direct costs fall below $250,000 becomes ineligible for the credit. A Maryland Small Film must exceed $25,000.

Additional requirements for Maryland Small Films

Maryland Small Films must also meet all of the following:

Be organized in Maryland for at least three months before the application date. (For an individual, unincorporated association, sole proprietorship, or general partnership not registered with the Maryland State Department of Assessments and Taxation: be in active business in Maryland for at least three months before the application date.)
Be independently owned and operated
Not be a subsidiary of another entity. A subsidiary is an entity in which more than 50% of the shares are owned or controlled, directly or indirectly, by another entity.
Not be dominant in its field of operation
Employ no more than 25 full-time employees

Documents You Will Need to Apply

With the Application for Qualification

Complete and signed Application for Qualification (or Maryland Small Film version)
Evidence of financing
Evidence of national distribution
Production schedule showing 50%+ of principal photography in Maryland
Estimated total of authorized direct costs in Maryland
For Maryland Small Films: documentation showing the entity meets the additional criteria

Before the start of principal photography

Form for Additional Documentation & Information (not required for Maryland Small Films)

Before the conclusion of principal photography

Draft engagement letter for the independent third-party CPA, including sample sizes and percentages for the Agreed Upon Procedures, approved by the Department
Not required for productions with total authorized direct costs of less than $250,000 — in practice, Maryland Small Films between $25,000 and $250,000

With the Application for Final Tax Credit Certification

Complete Application for Final Tax Credit Certification (or Maryland Small Film version)
Final closing documentation
For productions with authorized direct costs greater than $250,000: an independent third-party CPA Agreed Upon Procedures report
For Maryland Small Films: copies of receipts and proof of payment for ALL expenses submitted as direct costs
List of all loan-out and personal services companies paid in connection with the production
Certification that no amounts are owed to any Maryland entity that provided goods or services in connection with the production

The Film Office recommends reviewing the correct Application for Final Tax Credit Certification before production starts, so the entity knows in advance what documentation will be required.

How to Apply

The application process has multiple stages and strict deadlines. Use the timeline below to track required submissions.

Application timeline

When	What is required
Before any work begins in Maryland	Submit the Application for Qualification (or Maryland Small Film version) with all required attachments.
Within 30 days of a complete application	The Department issues a Letter of Qualification stating the maximum credit available, or notifies the entity it is not eligible.
Before principal photography begins	Submit the Form for Additional Documentation & Information. Not required for Maryland Small Films.
Within 120 days of the Letter of Qualification	Principal photography must begin in Maryland. May be extended at the Department’s discretion for circumstances beyond the entity’s control.
Before principal photography concludes	The Department must approve the draft CPA engagement letter outlining sample sizes and percentages. The Department sets the sample sizes. Not required if authorized direct costs are under $250,000.
Within 180 days after the completion date	Submit the Application for Final Tax Credit Certification with all final documentation. May be extended at the Department’s discretion.

How to submit

Applications may be submitted electronically or by mail.

Email: [email protected]

Mail or in person:

Josh Slates
Maryland Film Office
Maryland Department of Commerce
401 East Pratt Street, 14th Floor
Baltimore, MD 21202

Applications received by email are time-stamped by the Department’s email system. Applications are reviewed and approved in the order complete applications are received.

Important. Materially incomplete applications are not considered. Any decision made by the Department during the application process is final.

Application Review Timeline

Letter of Qualification: issued within 30 days after the Department receives a complete application.
Final Tax Credit Certificate: issued after the Film Office reviews the Application for Final Tax Credit Certification, all closing documentation, receipts, and (if required) the CPA Agreed Upon Procedures report.

How You Claim the Credit

After the Department issues a Final Tax Credit Certificate:

File the applicable Maryland state income tax return.
Complete the Form 500CR section of the return.
Include a copy of the Final Tax Credit Certificate with the return.

Important. The credit is only available with electronically-filed returns. See the Comptroller of Maryland’s website for filing instructions.

If the credit exceeds the production entity’s Maryland income tax liability for the year, the entity may claim a refund for the excess amount.

Before applying, the Department recommends consulting a tax specialist, a tax attorney, or the Comptroller of Maryland regarding the impact of the credit on the entity’s taxes.

Closing Credits, Acknowledgements, and Cast & Crew Screening

Closing credits and acknowledgements

As required by statute:

Feature films must contain a 5-second static or animated logo promoting Maryland in the end credits, before the below-the-line crew crawl, for the life of the project. The project’s website must include a link to the State’s film and TV website.
Television series must contain an embedded 5-second static or animated logo promoting Maryland during each broadcast worldwide for the life of the project. The project’s website must include a link to the State’s film and TV website.

Cast & crew screening

Production entities must work with the Maryland Film Office to secure a cast and crew screening of the production in Maryland before the general release of the project.

Compliance with Maryland Law

The film production entity must comply with all applicable Maryland laws, rules, and regulations.

All loan-out and personal services companies used in connection with the production are also subject to Maryland law, including all applicable withholding requirements. As part of the Application for Final Tax Credit Certification, the production entity must provide the Department with a list of all loan-out and personal services companies paid in connection with the production.

A Final Tax Credit Certificate will not be issued until the Maryland Film Office confirms that all amounts owed to Maryland entities providing goods or services in connection with the production have been paid.

Frequently Asked Questions

Legal Notices and Required Language

This credit is authorized under Maryland Tax-General Article §10-730.

Amending legislation:

DECADE Act of 2026 (HB 898 / SB 388) — added the application amendment provision and required a Commerce evaluation report; effective July 1, 2026

Program resources:

Applicants should consult the statute and applicable regulations for the complete legal requirements governing this tax credit.

Contact

Josh Slates
Maryland Film Office
Maryland Department of Commerce
401 East Pratt Street, 14th Floor
Baltimore, MD 21202
Email: [email protected] - PDF - 231.17 KB