Unlock Savings with Illinois Film Tax Credits

Why Illinois?

Home to rich farmland, shady suburbs, and the third largest metropolis in the country, Illinois has everything a production could need.

Whether you are filming on the modern and brawny streets of Chicago, or one of Illinois’s many charming small towns like Woodstock, you’ll have support from the state’s talented and experienced crew base, the Illinois Film Office, and of course, attractive Illinois film tax credits.

It’s no wonder why there have been so many movies filmed in Chicago and beyond, from modern classics like The Blues Brothers, Ferris Bueller’s Day Off, and Home Alone to recent favorites such as Christopher Nolan’s Batman trilogy and David Fincher’s The Killer.

Over the last decade, as Illinois film tax incentives have expanded in lockstep with streaming, many television series have also taken advantage of all Illinois has to offer including FX’s wildly popular The Bear, Fargo, and NBC staples Chicago Fire, Chicago Med, and Chicago P.D.

The Illinois film tax credit program enhances the state’s appeal to productions like these and many more by reducing financial barriers and enabling more projects to utilize the state’s resources. Let’s take a look at how the Illinois Film Office tax credit program has grown.

How Illinois film tax credits came to be

The Illinois film tax credit was first established in 2004 to revitalize and sustain the state’s film and television industry.

Recognizing the economic benefits of production—job creation, tourism, and increased local spending—Illinois built its film incentive program to compete with those in other states such as California, Georgia, Louisiana, and New York.

Since its inception, the Illinois film tax credit has evolved to meet the needs of production. Most recently, in 2025, Illinois expanded the program, offering enhanced credits for in-state spending and extending the incentive’s expiration until December 31, 2038.

With these enhancements, the Illinois film tax credit remains one of the most competitive film tax incentives in the country and stands as a cornerstone of the state’s filmmaking infrastructure, offering robust support to both small and large-scale projects.

What are Illinois film incentives?

Illinois offers a fully transferable tax credit that can return back to productions anywhere from 30% to as much as 65% of qualified in-state production spending.

We will break down exactly how much eligible productions can save, and how the credit breaks down across production spend categories, in just a bit. But first, let’s look at how the Illinois film tax credit is structured.

As a transferable film tax credit, the Illinois film tax incentive differs from refundable film tax credits and film rebates offered by some other states.

With transferable tax credits, the state does not issue your production a refund check but instead offsets your in-state tax liabilities.

However, many productions receiving these tax credits don’t have businesses formed in the state, and therefore do not have state tax liability to offset. That’s why the Illinois film tax credit is transferable; you can sell the credit to another company, which in turn can use the credit to offset their in-state tax liability.

In order to qualify for the Illinois film tax credit, productions must meet certain minimum spending thresholds outlined by the Illinois Film Office and the Illinois Department of Commerce and Economic Opportunity.

Projects that have a final runtime longer than 30 minutes must spend at least $100,000 in the state to qualify for an Illinois film tax credit. Projects that are 30 minutes or less must spend at least $50,000—one of the lowest minimum spend requirements in the country.

The Illinois film tax incentive program does not have a project cap or an annual funding cap. This means there is no upper limit to the amount a single project can potentially see reimbursed via tax credits, and no upper limit to the amount of money the program can dish out in a single tax year. 

With no project cap and no annual cap, the Illinois film tax credit is highly attractive to productions looking to maximize film tax credits. Very few other states—Georgia among them—have similarly uncapped incentive programs.

In order to take advantage of the savings, though, your production must be one of a handful of eligible project types.

Who qualifies for Illinois film tax credits?

Projects eligible for Illinois film tax credits include:

• Feature films
• Television series (scripted and unscripted)
• Commercials
• Documentaries
• Music videos
• Animation
• Interactive content

As of 2024, national talk shows, contest-based shows, and game shows can also qualify for Illinois film tax credits, a huge boon for unscripted production in Illinois. 

What expenditures qualify for Illinois film incentives?

If your project is eligible for an Illinois film tax credit, congrats! You’re on your way toward significant production savings in the Prairie State. 

In order to maximize your return, it’s important to understand which production expenses qualify for the Illinois film tax credit. Fortunately, most production expenses incurred in Illinois during your shoot can qualify. That means you can save money on everything from production payroll to location rentals to craft services.

And with the program updates made in December 2025, there are now even more ways to save in Illinois. Crucially, the enhancements made to the incentive are effective on all qualified expenses incurred by eligible projects on or after July 1, 2025.

To better understand how much you can now save, and where, it’s helpful to break down production expenses into two categories:

Cast and crew payroll

The first, and often the largest, chunk of your budget that we’ll look at goes toward paying your hardworking cast and crew. In Illinois, the amount of cast and crew payroll expenses you can earn back through tax credits depends primarily on each workers’ residency.

Illinois residents

Starting July 1, 2025, compensation paid to Illinois residents—including both above-the-line and below-the-line cast and crew—can qualify for a 35% credit on the first $500,000 paid to each worker.

For example, if your director is an Illinois resident who will be paid $800,000 for her work performed in Illinois, your production can earn up to $175,000 back in Illinois film tax credits for this qualified expense—35% of the first $500,000 paid to the director. 

It’s worth noting that Illinois labor expenditures do not include:

• Above-the-line Illinois labor expenditures exceeding 40% of total Illinois production spending (unless the Illinois Department of Commerce approves a waiver). 
• Above-the-line spending paid to related parties exceeding 12% of total Illinois production spending.
• Below-the-line spending paid to a related party that exceeds fair market value.

Additionally, only wages paid to up to two executive producers per production can qualify. However, if an executive producer receives compensation for another position (such as writing services), the salary for that position may still qualify and won't count toward the two-producer limit. Line producers are also not subject to this limitation.

In addition to the 35% credit on compensation paid to Illinois residents, projects can also earn Illinois film tax credits on payroll for…

Nonresidents

Compensation paid to nonresidents can qualify for 30% back on the first $500,000 paid to each nonresident in Illinois. 

As with Illinois resident payroll, this applies to both above-the-line and below-the-line cast and crew and only wages paid to up to two executive producers per production can qualify.

Furthermore, in order to incentivize local hires and support Illinois’s crew base, the program limits the number of nonresidents eligible for the payroll credit. No more than 13 nonresident cast and crew can be eligible for a 30% payroll tax credit and eligible nonresident positions are limited to:

• Director
• Writer
• Director of photography
• Production designer
• Costume designer
• Production accountant
• VFX supervisor
• Editor
• Composer
• Executive producer (capped at two)
• Line producer
• Associate producer 
• Post-production supervisor
• Actors

Additionally, the number of nonresident actors for whom compensation can qualify depends on the project’s total spending. For an accredited production with Illinois production spending of:

• $20,000,000 or less, no more than 4 nonresident actors' wages can qualify
• Between $20,000,000 and $40,000,000, no more than 5 nonresident actors’ wages can qualify
• $40,000,000 or more, no more than 6 nonresident actors' wages can qualify

These limitations do not include reality stars. For a television series, qualifying nonresident wages are applied per episode to the entire season..

Payroll is often a production’s largest expense, and so it’s very important to keep these nonresident compensation rules in mind and budget accordingly when planning your Illinois shoot.

Production expenses

Along with the payroll tax credit, most physical production expenses incurred during production in the state and purchased from Illinois vendors are eligible for a 35% Illinois film tax credit. 

This means everything from set construction materials to prop rentals to wardrobe purchases can help you earn back your production budget in Illinois. 

Costs related to airfare, too, can now qualify toward your total Illinois film tax credit, provided airfare is purchased from an airline with its corporate headquarters domiciled in Illinois, such as United Airlines.

For a complete list of qualified production expenses, check out the Illinois film tax credit program’s comprehensive list.

Bonuses

Earlier, we said that the Illinois film tax credit ranges from 30% to up to 65%. So how can you maximize your Illinois film tax incentive and earn the largest return possible?.

The answer is by qualifying for Illinois film tax incentive bonuses! 

Starting on July 1, 2025, a handful of new bonuses help productions that make a meaningful contribution to Illinois’s economy and production infrastructure earn more.

Productions receive an additional 15% tax credit on salaries paid to individuals (earning at least $1,000 in total wages) who live in economically disadvantaged areas. For the purpose of this bonus, economically disadvantaged areas are defined as those in which the unemployment rate is at least 150% of Illinois’s annual average.

Projects can also receive a 5% bump on Illinois labor expenditures generated by the employment of Illinois residents for services performed for an accredited production in one or more Illinois counties outside of Cook, DuPage, Kane, Lake, McHenry, and Will Counties 

Additionally, television series relocating to Illinois from another jurisdiction can receive a 5% bonus on Illinois production spending for their first season in Illinois. To qualify, the production must be a television series in which all prior seasons of the series were filmed outside of Illinois

Finally, productions that are certified as green by the Department of Commerce and Economic Opportunity can earn a 5% bump on Illinois production spending.

What are the requirements for Illinois film tax credits?

In addition to meeting the minimum spend requirements outlined above, productions must satisfy a few other requirements in order to qualify for an Illinois film tax credit.

Chief among them is Illinois’s diversity requirement. Production companies must promote diversity by making good-faith efforts to hire ethnic minority persons and women. To help achieve this, projects must submit a diversity plan when applying for Illinois film tax credits. 

In the diversity plan, production companies must outline the proactive steps that they will take when hiring a crew that represents the state’s diversity.

All projects that commence on or after December 12, 2025 must withhold tax on all payments to loan-out companies for services performed in Illinois. Amounts withheld are included in the calculation for Illinois labor expenditures. This applies to compensation paid to loan-out companies for services performed by nonresident employees in-state.

After completing production in Illinois, production companies must work with an independent, licensed certified public accountant to validate and calculate their local production spend. The CPA must certify qualifying Illinois expenses for the tax credit claim and must send all documentation to the Illinois Film Office.

Most productions also must provide screen credit to the Illinois Film Office in their project’s end credit crawl by including an official Illinois Film Office logo as provided by the Illinois Film Office. Commercial projects are exempt from this requirement.

Finally, projects must provide certain marketing materials to the Illinois Film Office after completing production, including production stills, a DVD of the completed project (yes, a DVD), and project posters. A complete list of materials can be found on the Illinois film tax credit application.

By adhering to these requirements, projects can prevent unnecessary delays and hurdles when applying for Illinois film tax credits.

How to apply for Illinois film tax incentives

So how do you apply for Illinois film tax credits? Luckily the process is fairly simple and straightforward.

First, projects must submit an initial application to the Illinois Film Office. Television, film, and streaming projects must submit an application at least five days prior to the start of principal photography. Commercials must apply at least 24 hours before filming begins in Illinois.

The application should include a complete script, detailed budget, and production schedule along with:

• Proof of ownership or rights to the project’s intellectual property
• A diversity plan outlining specific goals for hiring minorities and women
• A competitive need statement demonstrating that if not for the credit, the applicant’s production would not occur in Illinois.

After the Illinois Film Office approves a project’s initial application, the office will issue an Accredited Production Certificate to the applicant. This certificate does not automatically entitle the applicant to a film tax credit, but rather certifies that the production meets all eligibility criteria of the Illinois Film Office tax credit program.Once production in Illinois is complete, the production company claiming the Illinois film tax credit must then work with an independent, licensed CPA who will certify all qualifying Illinois expenses for the tax credit claim.

Upon receipt of the claimed credits from the CPA, the Illinois Film Office then reviews the project’s qualified expenses and diversity efforts. If everything is approved, the film office issues a Tax Credit Certificate, and just like that, you’ve secured your Illinois film tax credit.

As we mentioned earlier, Illinois film tax credits are transferable. If your production company does not have sufficient Illinois state tax liability to offset, you can transfer the credit within one year of its issuance.

Illinois film tax credits can be divided between up to 10 transferees but they can not be re-transferred. Before transferring your tax credit, you must submit a request to transfer via a Transfer Request Form. The request must include:

• Original taxpayer’s name
• Date the original tax credit certificate was issued
• The tax credit amount earned
• Amount of the tax credit to be transferred
• Federal Taxpayer ID # of transferee with attached W-9 from the buyer

Illinois film tax credits also have a carry forward of five years, meaning they can be used up to five years after their issuance.

Wrapping up

With substantial financial incentives for productions of all sizes, the Illinois film tax credit not only attracts filmmakers to the Land of Lincoln but also supports local communities and economies.

By understanding and leveraging the Illinois film tax incentive, you can ensure your next project thrives creatively and financially. 

For more information on Illinois film tax incentives, or to compare incentives across different states, visit Wrapbook’s Production Incentive Center—your ultimate partner in navigating America’s film incentive landscape.