Most productions can receive 96% of their allocated credit without the extra steps. Full certification depends on project-specific plans and good-faith efforts, not hiring quotas.
California productions generally must document efforts to broaden access to jobs to qualify for the final 4% of their allocated film and television tax credits. Opting out of those additional requirements—or failing to satisfy them—normally leaves a production eligible for at most 96%, subject to verification and audit.
The state began collecting workforce race, ethnicity and gender information in 2020. In 2025, it expanded the requirements, tying full credit eligibility to a process for setting and assessing diversity goals. Some studios now object to the workload and allege potential conflicts with federal law, The Hollywood Reporter said.
Every applicant reaching Phase II, the second application stage of the current Program 4.0, must submit the diversity checklist, Form DEIA1. Missing that checklist disqualifies the applicant from the tax-credit program. The checklist covers hiring, workplace education, workforce development and supplier diversity.
The later workplan and assessments are optional for access to the base credit, but generally necessary for the full amount. Independent films with a qualifying expenditure budget of $10 million or less are exempt from the 4% reduction. They still must submit the checklist and the workforce demographic information required of all approved applicants.
The percentages apply to the allocated credit, including any additional credit increases—not to the production’s budget. A rejected diversity workplan therefore does not automatically mean losing all tax credits.
A participating production must set non-numeric goals and explain the strategies it will use to meet them or make a good-faith effort. The California Film Commission checks whether those strategies are detailed, tailored to the project and reasonably achievable. The workplan must explain how the strategies could support goals broadly reflective of California’s population, including race, ethnicity, gender and disability.
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The rules expressly require rejection of workplans and assessments containing quotas or numerical goals for protected groups. The test is the production’s efforts toward its approved goals, not whether it hires a specified number of people from a particular group.
| Stage | Production’s deadline and task | Commission review |
|---|---|---|
| Workplan: DEIA2 | Submit within 30 calendar days of the credit-allocation letter, setting out goals and strategies. | Approve or reject within 30 calendar days of receipt. |
| Interim assessment: DEIA3 | Submit before principal photography—the main filming period. Describe progress, remaining plans, barriers and steps to overcome them. | Determine within 30 calendar days whether the assessment shows a good-faith effort. |
| Final assessment: DEIA4 | Submit within 60 calendar days of creation of the production’s final element, assessing efforts toward the workplan’s goals. | Determine within 30 calendar days of receipt whether the production qualifies for 100% or 96% certification. |
After rejecting a workplan, the commission must give feedback. The applicant has 30 calendar days from the rejection notice to revise and resubmit it. Missing that deadline, or failing to address the feedback, generally limits certification to 96%. Missing the initial workplan or assessment deadlines also counts as opting out.
A timing exception applies when filming starts within 30 calendar days of the allocation letter. If workplan approval arrives on or after filming begins, the interim assessment is due by the next business day after approval.
The final submission keeps the effort assessment separate from voluntarily self-reported workforce race, ethnicity and gender statistics. Those statistics cover workers whose wages qualify for the credit and those whose wages do not. All approved applicants must submit them, but the commission cannot use them to decide whether a production made a good-faith effort. The final determination goes to the accountant conducting the production’s final audit.
The commission said 105 of 115 productions opted into the additional provisions across the last eight application windows. That measures participation, not final approval or payment of the additional credit.
Fanshen Cox, who managed the diversity, equity, inclusion and accessibility program at the June meeting and has since left the commission, said minority representation had moved backwards. UCLA research published earlier in 2026 documented declines in streaming films.
| Measure | 2024 | 2025 |
|---|---|---|
| Share of lead actors from minority groups | 51% | 36% |
| Share of films with majority-minority casts | 41% | About 26% |
Cox said returning production jobs should also reach Californians seeking a foothold in the industry and reflect the state’s diversity. Commission executive director Colleen Bell said the commission remained in regular talks with studios, with the goal of keeping production in California and career opportunities open to everyone.
At the June 5 commission meeting, board member Arturo Barquet, Universal Filmed Entertainment’s chief financial officer for global production operations, said Universal had repeatedly considered opting out. He alleged that parts of the requirements conflicted with federal law.
Studios also objected to required orientation sessions and extensive paperwork. Sony Pictures’ production administration president Andrew Davis said studios wanted to participate but called compliance a “tremendous burden on both television and features.”
Barquet said he understood Paramount was not pursuing the diversity program. A person familiar with the situation gave a more qualified account: Skydance had no blanket policy against participation, and several shows under commission review were being considered for the initiative.
Barquet also said an untitled Universal film had been rejected three times despite the studio’s belief that it complied. He said Universal’s Snoop Dogg biopic had been rejected twice before a recent greenlight, and that he did not know why the initial submissions had failed. These were production-level diversity-program rejections, for which the rules provide feedback and resubmission, rather than permanent denial of all credits.
The biopic’s expected tax credit was $17 million, although commission approval was still pending, a person familiar with the matter said. Completing the diversity process remains necessary for the production to receive the full amount; failure to complete it would reduce the credit.
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