Best Practices for Accountants to Maximize Incentives

1. Identifying and categorizing qualifying expenses

To begin, you’ll need to identify which items in your budget will qualify for incentives. This requires a knowledge of what’s in your budget as well as a thorough understanding of the legislation in the city or state where you plan to shoot.

Start by making sure that you understand the specific qualifications for each incentive you wish to pursue.

This will make it easier to quickly determine which incentives you will and will not be able to apply for. Next, comb through your budget and compare each line item against the criteria you defined in the previous step. 

Qualifying expenses often include things like local hires or in-state lodging, but can be tied to a wide variety of criteria like location, type of expenditure, type of production, resident status, employment requirements, and more. 

If you need clarification on anything, don’t be afraid to reach out to the local film office. They’re always eager to help, and might be able to provide a simplified look at the legislation.

You could also take a look at the powerful tools available in Wrapbook’s Production Incentives Center, like our Incentive Finder. 

This easy-to-use database asks for a few details - such as the type of production and when you plan to shoot - and generates a list of what incentives are available to you.  

These initial steps will give you a good sense of where your project stands in terms of qualifying for incentives - but it’s worth it to go a little further. 

Wrapbook recommends using your budgeting tool to create a system to organize potential incentives. 

Our eBook goes into fine detail, but at the very least you should create a specific label or code for each distinct type of state incentive, tax credit, or rebate. This will allow you to flag each qualifying line item into its proper category.

This process may sound time-consuming - and it is! But it is important to do your due diligence to guarantee that you are maximizing your eligibility for incentives.

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2. State-specific strategies for flagging incentives

No two states are the same when it comes to their incentive initiatives. It’s essential to understand the differences in advance so you don’t plan on savings that you won’t receive. 

To help, Wrapbook has created a state-by-state breakdown of incentives for 2023. Additionally, our Production Incentives Center includes a State Map Tool and a Compare State Incentives Tool to help you explore incentives by where you want to shoot.

For instance, in California, above-the-line workers (such as directors, writers, producers, and stars) do not qualify for incentives. This means you should avoid flagging any line items related to these workers when you put together your incentives budget.

New York, on the other hand, includes some above-the-line positions in their program, but their legislation includes a $500,000 compensation cap. This means that only the first $500,000 of pay to those people qualifies for incentives.

Down south, you might find that cities such as Savannah, Georgia or localities like Jefferson Parish and St. Bernard Parish in Louisiana have their own incentive structures. Don’t get confused and use the state’s guidelines if shooting in those locations! 

Managing incentives across multiple states

Wrapbook has put together a guide to managing multi-state productions that touches on what to know about combining incentives across states.  

What our eBook expands upon are all the ways to make sure that your multi-state incentive plans are organized and airtight.

For instance, one of the first things you’ll want to do if you find yourself shooting in multiple states (or, say, shooting in one state but doing post in another) is update those flags you made in your budgeting software. 

You’ll want to create state-specific flags that keep track of which part of the production process is happening in which state, and whether those expenses qualify for incentives or rebates. 

Additionally, if you’re shooting in a locale with different or additional incentives from the state (like the aforementioned Jefferson Parish), you’ll want to organize and calculate those returns in their own category. 

Our eBook goes into further detail about how to label these flags. 

It also takes a look at other, more complex situations, like what to do in the rare cases that a state allows non-resident vendors to qualify for incentives. 

3. Budgeting software best practices

All of these strategies require in-depth use of some type of budgeting software. 

Our eBook takes a look at some tips to help navigate two of the most popular programs, Movie Magic and Showbiz Budgeting.

Both feature a full suite of tools designed to make your life easier when constructing budgets that maximize state production incentives. There are differences - like Showbiz’s ability to create “phases” that allow you to compare incentive impacts for different production locations without creating an entirely separate budget for each. 

If you’d prefer to work on the cloud, Movie Magic offers cloud based updates that give you the ability to keep your budget up to date without having to export it each time you make a change. 

No matter which software you use, make sure to update your budget constantly, keep your receipts, and always keep an eye out for hidden fees.

4. Collaboration & communication

A detailed budget is only as good as the team supporting it. It doesn’t matter how much you put in to organize and flag your incentives if no one follows the road map you lay out.

To that end, it’s important to keep everyone on the same page by fostering interdepartmental cooperation. This could involve regular meetings with the team or giving out written guides.

Whatever you choose, make sure to include all production members involved in budgeting, purchasing, or any other activities that impact the flagged budget lines.

Finally, don’t be afraid to turn to the experts. Budgeting for incentives can be a complex and onerous process, and Wrapbook is here to help. Our top-notch labor-relations team can provide you with both union and payroll fringes and rates to ensure your numbers are correct. 

Or, if you’re just looking for a quick estimate, you can try our Payroll Estimator tool. 

Wrapbook also offers expert incentive support.

Our Incentive Center is the easiest way to stay up-to-date on the constantly evolving world of film tax incentives and rebates. Our interactive database - assembled with the help of Ryan Broussard, Wrapbook’s VP of Sales and Production Incentives - is more than just a library of facts and figures.

It’s a powerful tool to help your team make informed decisions.

Wrapping up

Creating a budget that makes the best use of all available incentives is a difficult and time consuming process. However, if approached with the appropriate technical know-how and a deep understanding of what kind of benefits are offered by different states, the upside is worth it.

For more on understanding the power of incentives, check out the E-book, or our interview with our in-house incentives guru, Ryan Broussard.