Kentucky Lets Film Companies Keep Unused Tax Credits
Unused Credits Now Roll Over—Starting 2026
The Kentucky legislature has greenlit a sweeping update to its film and entertainment tax credit program, designed to keep production dollars—and crews—local. Beginning in 2026, any unused portion of the $75 million annual tax credit will no longer vanish at year’s end. Instead, producers can carry forward unused credits into future years, giving them unprecedented financial flexibility.
For filmmakers, video game studios, and commercial producers, this means long-term stability—no more scrambling to spend every dollar in a single season. Instead, budgets can stretch across multiple projects, ensuring Kentucky remains a competitive hub for high-budget entertainment.
Expanding the Creative Frontier
The updated rules dramatically broaden what qualifies for the credit. Beyond traditional films and TV, the credit now extends to:
- Video games
- Music videos
- Commercials
- Other digital media productions
This expansion isn’t just bureaucratic tweaking—it’s a strategic push to attract a diverse slate of creators. By casting a wider net, Kentucky positions itself as a versatile destination for everything from indie filmmakers to AAA game developers.
Stronger Local Investments, Bigger Economic Impact
To claim the credit, productions must now meet higher spending thresholds, with increased minimum requirements for:
- General local expenses (e.g., location fees, equipment rentals)
- Payroll for Kentucky-based crew and talent
The message is clear: More money spent in-state means more jobs, more vendor contracts, and a stronger economy. By incentivizing deeper local engagement, the state ensures that tax incentives directly fuel its workforce and small businesses.
The Big Picture: Kentucky as a Production Powerhouse
The changes reflect a bold vision—one where Kentucky isn’t just a filming location but a long-term partner in entertainment production. With rollover credits and an expanded project list, the state removes financial roadblocks while maximizing economic returns.
For producers, the message is simple: Kentucky is open for business—and ready to grow with you.
Key Takeaways
✅ Unused tax credits now carry over (starting 2026) ✅ New qualifying projects (video games, music videos, commercials) ✅ Higher local spending requirements to boost Kentucky’s economy ✅ Aim: More jobs, more productions, more economic impact
