Production companies are required to withhold 6% Georgia income tax on all payments to loan-out
companies for services performed in Georgia when getting the Georgia Film Tax Credit. Any amounts so
withheld shall be deemed to have been withheld by the loan-out company on wages paid to its employees
for services performed in Georgia. The amounts so withheld shall be allocated to the loan-out company’s
employees based on the payments made to the loan-out company’s employees for services performed in
Georgia. The loan-out company nonresident employees performing services in Georgia shall be considered
taxable nonresidents and the loan-out company shall be subject to income taxation in the taxable year in
which the loan-out company’s employees perform services in Georgia.
Registration: The loan-out company must register for a payroll withholding account using the Georgia Tax
Center (https://gtc.dor.ga.gov) if they are not already registered. The loan-out company must provide the
production company with the loan-out company’s federal ID number and Georgia withholding ID number.
Reporting Requirements: The production company will provide Form G2-FP to the loan-out company by
January 31st. The loan-out company must complete form G2-FL and provide it to the employee(s) allocated
the withholding amounts by February 28th. The loan-out company must also electronically file a copy of
Form G-1003 and Form G2-FL by February 28th.
Loan-out Filing Requirements: Upon completion of its tax year during which the loan-out company’s
employees performed services in Georgia, the loan-out company must file a Georgia income tax return (and
net worth tax return, if applicable) and report its income. The loan-out company must also pay its tax
liability as would normally be required.
Allocation of Personal Income Credit Against Taxes: The 6% withheld by the production company shall be
allowed as a credit to the employee whose services were provided in the certified project against the
employee’s income tax. If the services of multiple employees are provided by the loan-out company, the
amount deducted and withheld shall be allocated to each employee based on the payments made to the
loan-out company’s employees performing services in Georgia.
Employee Filing Responsibility: The employee providing services must file a Georgia income tax return,
attaching Form G2-FL provided by the loan-out company, and apply the credit for the withholding tax
allocated to the employee against the calculated individual income tax liability for that employee.
Contact Bob Heuel at bheuel@mjcpa.com or by calling 770-955-8600 for additional information.
