I am a writer who survived the pandemic and the very long WGA strike. We are currently at a crossroads in the industry— post-strike, not as many jobs are available in Film & TV as there were pre-strike, and now the California Employment Development Department (EDD) wants to tax us more by refusing to recognize loan out corporations. 

In short, the EDD wants to outlaw loan out corporations which would make all business expenses non deductible, including pension contributions as well as commissions to agents, lawyers, and managers. This means that if you are an employee of a corporation (S-corp or LLC), you would NOT be able to deduct any business expenses. 

The IRS stopped allowing employee business expenses on personal returns a few years ago, which is why many of us in the industry opted to "incorporate."

We have been told that this came as a result of an ongoing audit of the payroll company Cast & Crew (C&C). C&C sent an email before the start of Memorial Day weekend (2024) announcing EDD’s edict on loan out companies.

The California state government has been silent on the issue. Someone within the government must have known this was coming down the pipeline, however, no one in the industry was given a heads up. 

Given the prevalence of AI, fewer jobs, and now this from the EDD, the Entertainment Industry is slowly being gutted.

We must take a stand.

The EDD must continue recognizing loan out companies in the entertainment industry to ensure our survival.

Loan out companies have been a lifeline for many of us, providing flexibility and financial stability during uncertain times. Without this recognition, countless professionals could face increased taxes and financial hardship, further destabilizing an already fragile industry.

Please sign this petition to urge the EDD to continue recognizing loan out companies in our industry.