How to Check Your Tax Credit Eligibility for Digital Media in NJ

There's many places to build a digital media agency or production company producing commercials and films but with the New Jersey tax credits, the choice is simple.

New Jersey offers enticing tax credits for companies involved in digital media creation, providing a golden opportunity to recoup a substantial portion of your expenses. If you're a business owner or entrepreneur in New Jersey, understanding your eligibility for digital media tax credits is crucial. 

This guide will walk you through the process of checking your eligibility and maximizing the benefits available to you.

What is Digital Media Tax Credit?

A digital media tax credit is a financial incentive provided by government authorities to encourage and support the creation, production, and distribution of digital media content within a specific region or jurisdiction.

These tax credits are typically part of broader initiatives to stimulate economic growth, create job opportunities, and foster innovation in the digital media industry.

New Jersey offers a Digital Media and Film Tax Credit program to encourage digital media production within the state. This program provides a transferable credit against the corporation business tax for qualifying expenses related to film production, including digital media projects. That means once a credit is approved and received, it can be sold to a prospective buyer for cash if it is not needed directly by the receiving business.

How Much Tax Credit Can I Get for Digital Media Production in NJ?

In New Jersey, if you're involved in digital media production, whether you're a startup or an established company, there's a potentially lucrative opportunity for tax credits. Specifically, you may be eligible to receive tax credits amounting to 30% or more of your total expenditure within the state. For those businesses in certain NJ counties, additional credits, including a 2% diversity bonus, may be eligible. These tax credits are not just an abstract benefit; they are sellable, and can be an annual asset and investment for your business.

Did you know?
Digital Media Tax Credits are available for all years after 2019 and can be applied for annually until the credit runs out in 2027 or until the $100M in accessible funds are closed.

Want to know if your company is eligible for digital media tax credit?
Fill out our 2-minute questionnaire and we’ll contact you within 24 hours to discuss if your business is eligible, how much you could receive*, and how we can start the application process. Get Started

How to Check Your Tax Credit Eligibility?

Let's analyze the procedures that can assist you in obtaining possible funding for your digital media projects in New Jersey.

Step 1: Familiarize Yourself with Eligibility Criteria

Certain conditions must be met for your digital media business to be eligible for tax credits, including $1M in annual payroll of NJ based employees, which can include a K-1 for the business owners, and $1M in additional eligible spend on digital media expenses such as rent, equipment, freelance vendors, and other related digital media. That means if your business is spending over $2M a year in digital media expenses, you’ve passed the first step in eligibility.

Step 2: Validating eligible Digital Media spend

A certified team will be required to validate your digital media payroll and expenditures. At NJ Tax Credits, our team of certified accountants have the expertise and know-how from past approved Digital Media and Film Tax Credits, to ensure before an application is submitted, it is vetted and validated to ensure the highest chance of approval. That means an in-depth review of all payroll books, and general ledgers, including descriptions of projects and role and responsibilities of full-time employees working on eligible digital media.

Step 3: The Application Process

The program is complex and nuanced however with the right team, this can be a seamless and less intrusive process for the business. Once you’ve confirmed your eligibility and gathered all necessary information, you must pay close attention to deadlines and submission requirements outlined by the commission. This will require application fees and a certified CPA to authenticate and validate the eligible spend after careful review. When working with NJ Tax Credits, we handle the entire process, including the audit, from start to payout.

Step 4: Stay Updated On In-Process Applications & Program Changes

Tax credit programs can undergo changes and updates. Stay informed about any modifications to New Jersey's Digital Media and Film Tax Credit program to ensure ongoing compliance and maximize your project's benefits.

Check your eligibility with NJ Tax Credits now!

Benefits of Digital Media Tax Credits

Digital media tax credits offer a range of advantages for digital agencies, content creators, filmmakers, and production companies. Here are some key benefits:

Cost Reduction	Decreases overall production expenses for digital media projects.
Job Creation	Stimulates employment opportunities within the local community.
Industry Growth	Fosters the development of the local media and entertainment sector.
Competitive Edge	Enhances the region's attractiveness for global digital media productions.
Creativity and Innovation	Encourages a diverse range of digital media projects.
Tourism and Cultural Impact	Boosts tourism and positively impacts the cultural image of the region.
Collaboration Opportunities	Creates networking and collaboration prospects within the industry.
Long-Term Industry Presence	Contributes to the sustained growth and presence of the digital media industry in a specific location.

Digital media tax credits are like a superpower for your business in New Jersey. By understanding the rules, talking to experts, and following the steps, you can check if you are eligible for digital media tax credit or not. If yes, you can unlock impressive financial rewards to take your business to new heights.