CREATE Act Doubles Tax Cap for Film and TV Productions, Adds Inflation Protection Through 2030

The Creative Relief and Expensing for Artistic Entertainment Act, or the CREATE Act, is all about giving the film and TV production industry a substantial tax break boost. Specifically, it modifies existing tax rules for “qualified productions” (think movies, TV shows, and maybe some digital content) by significantly increasing the amount of money a production can spend and still qualify for certain tax benefits.

The New Tax Math for Hollywood and Beyond

Right now, there are limits on how much a production can spend and still take advantage of these tax benefits. The CREATE Act is essentially doubling those limits. For one key limit, the cap jumps from $15 million to $30 million. For another set of limits, the caps are moving from $15 million and $30 million up to $20 million and $40 million, respectively (SEC. 2). What does this mean in real life? It means bigger budget projects—or more of them—can qualify for these valuable tax incentives. This is a huge win for producers and investors, as it lowers the effective cost of making a high-budget film or series, potentially encouraging more production work to stay in or move to the U.S.

Inflation-Proofing the Incentives

One of the smartest moves in this bill is addressing inflation. Tax caps that don't adjust for rising costs lose their value over time. If a $15 million cap was set ten years ago, it buys a lot less production today. Recognizing this, the CREATE Act introduces an automatic inflation adjustment for these new dollar limits. Starting with tax years after 2026, those $30 million and $40 million caps will be adjusted annually based on the cost-of-living index (SEC. 2). For the average person, this is a good sign of policy that is built to last, ensuring that the intended benefit doesn't slowly disappear just because the price of lumber, catering, and actors' trailers keeps going up.

Five More Years of Action

These production tax benefits were scheduled to expire at the end of 2025. The CREATE Act pushes that termination date back a full five years, extending the program through December 31, 2030. This extension, combined with the higher caps, offers long-term stability for the entertainment industry. If you’re a set designer, a grip, or a local business owner who relies on film crews coming to town, this stability is crucial. It allows studios to plan multi-year projects and investments with confidence that the tax structure supporting them won’t vanish next year. All these changes—the higher caps, the inflation adjustments, and the extension—apply to productions that start after December 31, 2025 (SEC. 2).

The Bottom Line for Everyone Else

While this bill is highly specific to the entertainment sector, the real-world impact is about jobs and economic activity. When tax incentives make it cheaper to film here, it drives demand for local workers—from electricians and construction workers building sets to drivers and caterers feeding the crew. The trade-off, of course, is that these expanded tax benefits mean less tax revenue flowing into the federal treasury. Essentially, the government is foregoing potential tax income to incentivize the creation of films and TV shows, betting that the resulting economic activity and job creation will be a net positive.