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| Fi11. For purposes of the Film Production Credit,a production company or its designated payroll company has an obligation to withhold Michigan payroll taxes on wages paid to employees working on a Michigan production. Similarly,a production company
Agency:
Taxes
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Yes. The Film Production Credit provides that compensation-related payments
to performing artists and crew members will qualify as "direct production
expenditures" or as "qualified personnel expenditures" eligible for the tax
credit if individual income taxes (payroll taxes) are withheld from all payments
received by the performing artists or crew members "that are subject to taxation
under the income tax," and that the taxes withheld are properly paid to the
state of Michigan. MCL 208.1455(12)(c)(ii)(B); 208.1455(12)(j)(ii). Similarly,a
production company is required to withhold on payments made to a PEO or PSC if
the PEO or PSC does not withhold for their employees.
If an employee of an eligible production company,PEO or PSC is a resident of a
reciprocal state,payments made to that employee would be "subject to taxation
under the income tax",however pursuant to reciprocal agreements Michigan has
entered into with other states there would be no obligation for the production
company,PEO,PSC,or a designated payroll company to withhold Michigan income
taxes on compensation payments made to that employee. Accordingly,even though
Michigan payroll taxes would not have been withheld on payments made to that
employee,those payments would still be eligible for the Film Production Credit.
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