Music and Musicians Tax Credit and Jobs Act

The Music and Musicians Tax Credit and Jobs Act provides tax credits to Qualified Music Companies (QMCs) that produce, distribute, or promote music in Illinois. The program incentivizes job creation, economic growth, and diversity in the music industry, while strengthening the workforce and expanding opportunities for musicians, technicians, and vendors across Illinois.

The credit is primarily based on Illinois Labor Expenditures, with additional bonus credits available for certain employees, post-production work, and resident copyright productions. 

The Music and Musicians Tax Credit and Jobs Act provides a total of $2 million in tax credits annually, with a maximum credit of $200,000 per Qualified Music Company (QMC) per calendar year. Tax credits are awarded on a first‑come, first‑served basis, subject to available funding.

Initial Credit Calculations

• 10% of Illinois labor expenditures for the State-Certified Production or Series of Productions when the Qualified Music Company’s total QMC Payroll for the calendar-year is $150,000 or less.
• 15% of Illinois labor expenditures for the State-Certified Production or Series of Productions when the Qualified Music Company’s QMC payroll for the calendar year exceeds $150,000.

Additional Credits 

For each State-Certified Production or Series of Productions, additional credits may include:

• +15% of Illinois labor expenditures generated by the employment of Illinois residents in geographic areas of high poverty or high unemployment in Illinois.
• +7% of Illinois labor expenditures generated by employees paid at or above the applicable prevailing hourly wage rate
• +7% of Illinois labor expenditures spent on post-production sound recording for television or film work completed in Illinois.
• +10% of the qualifying Base Investment for a sound recording production of a Resident Copyright.

Any applicant who operates or is proposing to operate a business in Illinois may apply to become a Qualified Music Company (QMC). Eligibility requirements include:

• Being authorized to do business in Illinois;
• Being engaged directly or indirectly in the production, distribution, or promotion of music;
• Intending to make an Expenditures in the State;
• Being economically sound;
• Submitting a Diversity Plan
• Indicating whether the applicant intends to participate in Illinois-based workforce, education, and recruitment programs;
• A Department determination that the tax credit will have a positive impact on the State; and
• Approved by the Director of the Department of Commerce and Economic Opportunity.

Participation in the program includes qualification as a Qualified Music Company, certification of one or more productions or series of productions, and a separate request for the tax credit.

Step 1 – Apply to Become a Qualified Music Company

Applicants must submit a Qualified Music Company Eligibility Application once per calendar year.

Qualified Music Company Eligibility Application – Apply Here

Applicants should review and complete the required supporting forms before submitting the application:

• Diversity Plan Template
• Illinois Department of Revenue Tax Clearance (Form ITR-1)
• Certificate or Good Standing when applicable.

Deadlines: 

• Applications must be submitted by December 1
• All deficiencies must be corrected by December 31

Step 2 – Apply to Have a Proposed Production or Series of Productions Certified

Applicants must submit a separate Proposed State-Certified Production or Series of Productions Application for each proposed production or series of productions for which they intend to seek a tax credit.

Proposed State-Certified Production or Series of Productions Application – Coming Mid-September

Deadlines: 

• All applications must be submitted by December 1
• All deficiencies must be corrected by December 31

DCEO will review the Qualified Music Company Eligibility Application and at least one Proposed State-Certified Production or Series of Productions Application as part of the certification process.

Step 3 – Certification and Tax Credit Agreement

DCEO will issue a Qualified Music Company Certificate after:

• The Department determines that the applicant meets the Qualified Music Company eligibility requirements;
• The Department approves at least one proposed State-Certified Production or Series of Productions; and
• The required Tax Credit Agreement is executed. 

A Qualified Music Company Certificate confirms eligibility to participate in the program but does not guarantee the issuance or amount of a tax credit.

Step 4 – Request a Tax Credit Certificate

After certification, a Qualified Music Company must submit a separate Request for Tax Credit Certificate for each State-Certified Production or Series of Productions for which it is seeking a tax credit.

Request for Tax Credit Certificate, Reporting Forms and Instructions – Coming Soon

The request will require documentation supporting the qualified expenditures and the amount of credit requested, including verification by a licensed certified public accountant. DCEO will also require information necessary to review the production's final economic and diversity outcomes.

Deadline:

• The Request for Tax Credit Certificate must be submitted by March 1 following the applicable calendar year.
• Tax credits are awarded on a first‑come, first‑served basis, subject to available funding.

Step 5 – Submit Annual QMC Payroll Certification

Each Qualified Music Company must submit an Annual QMC Payroll Certification reporting its total QMC Payroll for the calendar year. DCEO will use the QMC's total calendar-year payroll to determine the applicable 10% or 15% credit rate for its State-Certified Productions or Series of Productions labor expenditures.

Annual QMC Payroll Certification – Coming Soon

Deadline:

• Annual QMC Payroll Certification must be submitted by March 1 following the applicable calendar year.

For program details or application guidance, please contact CEO.MusicTaxCredit@Illinois.gov

Statute Governing the Music and Musicians Tax Credit and Jobs Act

JCAR Administrative Rules (Coming Soon)