The pandemic found a way to turn the film production industry on its head. As covid-19 spread across the United States and left no rock unturned, the film industry suffered catastrophic consequences. For months, the industry stood at a halt as the country dealt with the novel coronavirus. Major Hollywood unions banded together and issued vast back-to-work guidelines in June 2020. Soon after, an agreement was reached with studios on the best practices for covid-19 safety. These rules were followed throughout the industry until being relaxed ever so slightly in July of 2021.
Today, productions have covid-19 departments that are often made up of a handful of individuals for lower budget productions and around a dozen for larger budget productions. Covid-19 continues to be a variable that will not be leaving the world of film production any time soon. Despite the disruption and uncertainty caused by the pandemic, the industry is making a strong comeback. Additional jobs and opportunities are spawning on a daily basis which signals a healthy future.
Despite the pandemic wreaking havoc on the film production industry, there is some good news that comes out of the madness. Many production studios received Paycheck Protection Program (PPP) monies. In addition to the PPP program, the Federal Government has another program that few have capitalized on for a myriad of reasons. The Employee Retention Credit (ERC) is a little-known refundable tax credit of up to $5,000 for each employee that was retained from March 13, 2020, to December 31, 2020, and up to $21,000 for each employee that was retained from January 1, 2021, to September 30, 2021.
The credit is designed to reward business owners for retaining employees throughout the pandemic. It is available to both small and mid-sized businesses. In the case of film production companies, this credit is a home run as all film production came to a screeching halt. Moreover, sanitation protocols were brought into the mix, reducing capacity in studios, business operating hours were shortened, and more. These are all line items that would qualify a film production company for the ERC.
ERT Credit has worked with several film studios in recent months. Each studio qualified either based on a reduction in their gross receipts due to the pandemic or was forced to reduce total capacity in the studio. At this time, ERT Credit is seeing an average return of $600,000 for film studios. For many, this is an injection of newfound capital that will allow for the enterprise to continue forward. Click here to reach out to us for more information.