California’s New Post-Production Tax Credit: How Film and TV Producers Can Save Up to 50% on Editing, Sound and Color Grading
California has introduced a new incentive that could change where film and television producers choose to complete their post-production work. On September 19, 2026, Governor Gavin Newsom signed Assembly Bill 2319 (AB 2319), establishing the state’s first standalone post-production tax credit.
The new program offers qualifying film and television productions a tax credit of 35% to 50% on eligible post-production expenses incurred in California. It covers a range of services, including picture editing, sound editing, sound mixing, visual effects, music scoring and finishing.
Perhaps the most significant aspect of the legislation is that productions do not have to film in California to qualify. A feature film shot in Georgia, a television series produced in New Mexico or an independent film shot overseas could potentially qualify by bringing its post-production work to California.
For producers weighing their post-production options, the new incentive provides another reason to consider working with California-based facilities such as Arcay Studios.
The program is expected to begin allocating credits in 2027. Here is what producers need to know about how it works, which projects qualify and how to prepare.
What is California’s new post-production tax credit?
AB 2319 creates a separate tax incentive specifically for post-production work performed in California.
California already has a Film and Television Tax Credit Program that encourages productions to film in the state. However, productions that shoot elsewhere have generally been unable to take advantage of that program simply by bringing their editing, sound or finishing work back to California.
The new legislation addresses that gap by creating an incentive for qualifying productions to complete post-production in California, even when principal photography takes place outside the state.
The credit starts at 35% of qualified California editorial post-production expenditures, with additional incentives available for certain types of work and production activities.
The legislation was authored by Assemblymember Nick Schultz of Burbank and signed into law on September 19, 2026
For production companies, this creates an opportunity to evaluate California post-production services alongside facilities in other states and countries offering similar incentives.
For California post-production professionals, the program is intended to encourage more editorial, sound, music, visual effects and finishing work to remain in the state.
How much is the California post-production tax credit?
The new program provides a base credit of 35% on qualified California editorial post-production expenditures.
Additional credits may apply to certain expenses, including qualifying work performed outside the defined Los Angeles zone, qualifying music scoring and productions that complete at least half of their principal photography days in California.
Depending on the circumstances, the combined credit can reach 50% of qualifying expenditures. Not every project or expense will qualify for the maximum rate.
An example of how the tax credit could work
Suppose a qualifying feature film hires a California post-production company to provide $100,000 in eligible sound editing, sound design, mixing and color grading services.
If the production is approved for the program and all $100,000 in expenses qualify for the 35% base credit, the potential tax credit would be $35,000.
The production would pay the post-production company its full $100,000 fee, then claim the applicable tax benefit through the program’s certification and tax procedures.
The effective cost of those services could therefore be reduced to $65,000 after the full credit is realized.
This is an illustrative example, not a guarantee of eligibility or reimbursement. The actual credit depends on the production’s approved allocation, qualifying expenditures, final certification and applicable tax rules.
It is also important to understand that the incentive is a tax credit, not an automatic discount on a post-production company’s invoice or an immediate cash rebate.
Can productions filmed outside California qualify?
Yes. This is one of the most important features of AB 2319.
Under the new program, qualifying film and television productions can potentially receive a California post-production tax credit even when principal photography takes place outside the state.
For example, a production could shoot its principal photography in Atlanta, complete its picture editing and sound post-production in California, and potentially qualify for the new incentive.
The same opportunity may be available to productions filmed in other states or internationally, provided they satisfy the program’s eligibility requirements.
This could be particularly useful for production companies that already have established filming locations, crews or production incentives elsewhere but want to work with California’s post-production talent and facilities.
A production cannot simply claim the new credit on expenses that have already received California’s existing film and television production tax credit. The standalone program is intended to complement the existing incentive rather than provide a second credit for the same project.
Which post-production services qualify under AB 2319?
The legislation covers a broad range of post-production activities associated with completing a qualifying film or television project.
These include:
- Picture editing and editorial services
- Dialogue editing and audio restoration
- Automated dialogue replacement (ADR)
- Foley recording and sound effects editing
- Sound design and sound mixing
- Music scoring, recording and editing
- Visual effects and compositing
- Color correction and color grading
- Picture finishing, encoding and other eligible final post-production activities
The exact treatment of individual expenses will depend on the law’s definitions and the California Film Commission’s implementation guidelines.
For producers planning a project, it is worth considering the entire post-production workflow rather than evaluating each service independently.
Picture editorial, sound post-production, visual effects and finishing often involve multiple vendors and specialists. Planning these services early can help a production determine which expenses may qualify and what documentation will be needed.
Sound post-production
Sound is an essential part of the filmmaking process, and it is specifically recognized under the new legislation.
Dialogue editing, ADR, Foley, sound effects, sound design and final mixing can all play a role in preparing a film or television episode for delivery.
For productions seeking California post-production services, Arcay Studios provides dialogue editing, sound design, audio restoration, ADR recording and mixing, including stereo and 5.1 surround sound.
Color grading and picture finishing
Color grading is another important stage of post-production, helping establish a consistent visual appearance across scenes, cameras and shooting conditions.
Arcay Studios provides color correction, creative color grading and picture finishing using DaVinci Resolve Studio.
Our work includes narrative films, episodic productions, documentaries and other video projects. Although not every type of project qualifies for the new tax credit, the same professional post-production services are available to productions of different sizes.
Which films and television productions are eligible?
The California Post-production Tax Credit is intended for qualifying film and television productions, including independent films.
The legislation establishes minimum production budgets and other eligibility requirements.
| Production type | Minimum production budget |
|---|---|
| Feature films, including independent films | $1 million |
| Television pilots | $1 million |
| Live-action and animated television series | $1 million per episode |
| Miniseries and limited series | $1 million per episode |
| Certain large-scale competition shows | $1 million per episode |
Additional requirements apply to individual production categories, including running-time requirements for certain television projects.
Productions must also meet the program’s California post-production expenditure requirements.
Under the legislation, at least 75% or $1 million of a qualifying production’s editorial post-production expenses must be incurred for eligible services performed in California or qualifying property used in the state.
Other conditions include completing post-production within the required period after application approval, copyright registration and compliance with applicable labor and program requirements.
Producers should review the complete legislation and forthcoming California Film Commission guidelines before determining whether a particular project qualifies.
Can independent films qualify?
Yes. Independent films are included in the new program, provided they meet the applicable production budget and other eligibility requirements.
A qualifying independent feature with a production budget of $1 million or more may be eligible even if it is filmed outside California.
However, a smaller independent film with a production budget below the program’s minimum would not qualify solely because it hires a California post-production company.
Independent producers should evaluate eligibility during budgeting and financing rather than waiting until post-production is underway.
Are documentaries, commercials and podcasts eligible?
The new incentive is primarily directed toward qualifying narrative film and television productions and certain other eligible production categories.
Documentaries, commercial advertising, talk shows, news programming and several other categories are expressly excluded.
A production’s use of professional editing, sound mixing or color grading services does not, by itself, make the project eligible for the tax credit.
Arcay Studios continues to provide post-production services for documentaries, podcasts, corporate videos and other projects, regardless of whether they qualify for the new incentive.
How do producers apply for the California post-production tax credit?
The new program will be administered by the California Film Commission, which also oversees the state’s existing Film and Television Tax Credit Program.
Although AB 2319 has been signed into law, the standalone post-production program has not yet begun accepting applications.
The legislation authorizes the California Film Commission to begin allocating credits on or after July 1, 2027, with at least four allocation periods per fiscal year through June 2032.
Producers interested in the incentive should begin preparing their projects now and monitor the Commission for official application dates, instructions and documentation requirements.
Step 1: Determine whether your production qualifies
Start by confirming that your project meets the program’s requirements for production type, budget and eligible California post-production expenditures.
If your production has already received a California film and television production tax credit, determine whether it is eligible for the new standalone program before proceeding.
The new incentive is not intended to provide a second tax credit for the same production.
Step 2: Develop a California post-production budget
Identify which portions of your post-production workflow will take place in California.
Your budget should account for anticipated expenses such as picture editing, sound editing, ADR, sound design, mixing, music, visual effects, color grading and finishing.
If you plan to work with multiple post-production vendors, request detailed estimates identifying the services each company will provide.
A California post-production company such as Arcay Studios can provide an itemized estimate for its services to assist with your budgeting and planning.
Step 3: Review the official application requirements
The California Film Commission will administer the application and allocation process.
Before applying, review the official program guidelines, including application deadlines, eligible expenses, required documentation and any applicable labor requirements.
Visit the California Film Commission website for program announcements and updates.
You can also review the full text of AB 2319 to understand the legislation establishing the new credit.
Step 4: Submit your application and obtain an allocation
Once the California Film Commission opens the new program, qualifying applicants will need to submit the required application and supporting materials.
Approval is not automatic. The program has a limited annual allocation, and applications will be evaluated under the Commission’s established criteria.
Productions should obtain the applicable credit allocation before incurring expenses they intend to claim under the new program.
Do not assume that post-production work completed before approval will qualify retroactively.
Step 5: Complete your California post-production work
After receiving an allocation, the production can proceed with its approved post-production plan.
Maintain accurate records of qualifying expenditures, including vendor invoices, payments, payroll records and documentation of services performed in California.
The California Film Commission will establish the documentation and audit requirements that productions must satisfy to receive final certification.
Step 6: Complete the certification and tax-credit process
Once post-production is complete, the applicant must satisfy the program’s final reporting and certification requirements.
The California Film Commission will determine the certified credit amount based on the production’s qualifying expenditures and applicable program rules.
The production can then claim the credit through the appropriate California tax procedures.
Producers should consult their production accountant or tax adviser regarding the credit’s application to their specific financial circumstances.
When does the California post-production tax credit begin?
AB 2319 was signed into law on September 19, 2026.
The legislation provides for the California Film Commission to begin allocating credits on or after July 1, 2027.
As of September 20, 2026, the new standalone post-production program has not yet opened for applications. Producers should not confuse it with the state’s existing Film and Television Tax Credit Program, which has its own application process and eligibility requirements.
For productions currently in development or planning post-production for 2027 and beyond, now is an opportunity to evaluate potential eligibility and begin identifying California post-production partners.
Work with Arcay Studios for your California film and television post-production
Arcay Studios is a California-based production and post-production company located in Santa Clarita, just north of Los Angeles.
We provide professional sound and picture post-production services for independent filmmakers, television producers, production companies and other content creators.
Our post-production services include:
- Dialogue editing, audio cleanup and restoration
- ADR recording and dialogue replacement
- Sound effects editing and sound design
- Stereo and 5.1 surround sound mixing
- Color correction and creative color grading
- Picture finishing and final delivery
Our facility is equipped for professional audio and video post-production, including multichannel audio mixing and color grading using DaVinci Resolve Studio.
We work with filmmakers and production companies throughout California and can collaborate remotely with productions located elsewhere in the United States and internationally.
Whether your project is filmed in Los Angeles, Atlanta, New Mexico or another location, our California-based studio can provide post-production services without requiring your production team to relocate.
Planning a production that may qualify for AB 2319?
If you’re developing a qualifying feature film or television project and considering California for post-production, we would be happy to discuss your needs.
Arcay Studios can provide detailed estimates for sound editing, sound design, mixing, color grading and other post-production services to help you plan your workflow and budget.
We can also provide documentation of our services and California business location to support your production’s recordkeeping requirements.
Eligibility for the California Post-production Tax Credit is determined by the California Film Commission. Hiring Arcay Studios does not automatically qualify a production for the incentive.
Contact Arcay Studios to discuss your upcoming film or television project and request a post-production estimate.
Frequently Asked Questions About California’s New Post-Production Tax Credit
Can I get a California post-production tax credit if my movie was filmed in another state?
Yes. The new program is specifically designed to allow qualifying productions to receive a tax credit for eligible post-production work performed in California, even when principal photography takes place elsewhere.
A film shot in Georgia, New Mexico, Texas or another state could potentially qualify if it meets the program’s production budget, California expenditure and other eligibility requirements.
Does my production company have to be based in California?
The new incentive is designed to attract qualifying post-production work to California, including work from productions filmed outside the state.
A production company does not necessarily need to be headquartered in California to participate. However, the applicant must meet the program’s legal and tax requirements, and the expenses being claimed must qualify under California law.
Can I hire a small California post-production company and still qualify?
Potentially, yes.
The legislation recognizes qualifying payments to third-party vendors and independent contractors. It does not require every post-production service to be performed by a major Hollywood studio or large post-production facility.
A production may be able to include eligible expenses paid to a smaller California post-production company as part of its approved post-production budget.
However, the production itself must qualify for the program, and the expenses must satisfy the applicable requirements.
Does Arcay Studios need to be certified before I can hire them?
AB 2319 does not establish a general certification requirement for every post-production vendor.
The production seeking the tax credit must apply to the California Film Commission and obtain the appropriate allocation and certification.
The Commission may establish additional documentation or vendor reporting requirements as the program is implemented.
Arcay Studios can provide itemized estimates, invoices and information about its California business location to assist clients with their production records.
Can I use a California post-production company remotely?
Yes. Productions can collaborate remotely with California post-production facilities without relocating their entire production team.
For example, a production company based in another state can transfer its footage and audio files to Arcay Studios for editing, sound design, mixing or color grading.
The important consideration for the tax credit is whether the services and expenses meet the program’s requirements for qualifying California post-production work.
Simply hiring a company with a California mailing address does not automatically establish that all of its services qualify.
Can I receive the credit if I have already started post-production?
The timing of your application and expenditures matters.
The legislation generally requires qualifying expenses to be incurred after the applicable credit allocation.
If your production has already begun post-production, consult the California Film Commission and your production accountant before assuming that any remaining expenses will qualify.
Work completed before the required allocation should not be treated as automatically eligible.
Is the tax credit a 50% cash rebate?
No. The program establishes a tax credit based on qualifying expenditures.
The base credit is 35%, with additional percentages available under specified circumstances.
The law also provides a refund mechanism, subject to applicable requirements and payment schedules. However, producers should not treat the credit as an immediate cash reimbursement or an automatic 50% discount from their post-production vendors.
Can independent films qualify for the California post-production tax credit?
Yes. Qualifying independent feature films are included in the program.
The legislation establishes a minimum production budget of $1 million for eligible feature films, including independent productions.
Films below the applicable minimum budget will not qualify simply because they complete their post-production in California.
Are documentaries eligible for the new California post-production tax credit?
No. Documentaries are among the production categories expressly excluded from the new standalone incentive.
Arcay Studios provides sound editing, mixing, color grading and finishing services for documentary filmmakers, but those services do not make an otherwise excluded documentary eligible for AB 2319.
Can I claim both California’s existing film tax credit and the new post-production tax credit?
The new standalone program is intended for qualifying productions that have not received California’s existing film and television production tax credit.
Productions should not assume they can combine both incentives for the same project.
Consult the California Film Commission and your production accountant to determine which incentive may apply to your production.
When can I apply for the new California post-production tax credit?
The California Film Commission is authorized to begin allocating credits on or after July 1, 2027.
Official application dates and procedures for the standalone program will be published by the Commission.
Visit film.ca.gov for updates.
Additional resources
For producers interested in learning more about the new legislation, the following official resources provide information about the law and California’s film and television incentive programs.
September 19, 2026 announcement of the new post-production tax credit and related legislation.
Read the official announcement
California Assembly Bill 2319
The full legislative text establishing the California Post-production Tax Credit.
Read AB 2319
Official information about California’s film and television incentive programs, application procedures and program updates.
This article provides general information about California’s new post-production tax credit as of September 20, 2026. Program eligibility, application procedures and qualifying expenditures are subject to applicable law and California Film Commission requirements. Producers should consult the Commission and their tax advisers before making financial decisions based on the incentive.
