Form IT-654 Instructions: New York City Musical and Theatrical Production Tax Credit (Tax Year 2025)

Form IT-654 is the New York State tax form used to claim the New York City Musical and Theatrical Production Tax Credit. It’s issued by the New York State Department of Taxation and Finance and applies specifically to eligible costs tied to qualified stage productions performed in New York City. If you’re a producer, production company, or business entity that invested in a musical or theatrical production that opened in NYC, this is the form that turns those production costs into a usable tax credit.

The credit was created to help revive the city’s live theater and performance industry, particularly productions that faced financial strain from pandemic-related shutdowns and reduced audiences. It offsets a portion of qualified production expenditures, including costs for sets, costumes, sound, lighting, and other direct production expenses, as long as the production meets the eligibility criteria set by Empire State Development and the Department of Taxation and Finance.

Who Needs to File Form IT-654

This form is for taxpayers, partnerships, and corporations that received a certificate of tax credit from Empire State Development for a qualified musical or theatrical production. You won’t fill this out speculatively; you need to have already gone through the certification process with the state agency overseeing the program before you can claim anything on your New York tax return.

Common filers include:

• Production companies operating musicals or theatrical shows in New York City venues
• Investors or partners in a production who received an allocated share of the credit
• Corporations claiming the credit against New York State franchise tax
• Individual taxpayers who are partners, members, or shareholders in an entity that earned the credit

If you haven’t received a certificate confirming your allocated credit amount, Form IT-654 doesn’t apply to your situation yet. The certification step happens outside of the tax return process, through the state’s economic development program administering the credit.

When This Form Is Used

You’ll use Form IT-654 when filing your New York State income tax or corporation tax return for the tax year in which the credit was earned or carried forward. The form calculates the amount of credit you can claim for the current year and tracks any unused credit that carries over to future years, since the program allows carryforwards when the credit exceeds your tax liability.

Partnerships and S corporations that pass the credit through to partners or shareholders also use this form to report how the credit is divided among individual filers, similar to how other New York credit programs handle pass-through allocations.

How to Get and Complete Form IT-654

Form IT-654 is a paper form only — there’s no fillable digital version. You’ll need to download it, print it, and complete it by hand before attaching it to your New York State tax return. The official PDF is available directly from the New York State Department of Taxation and Finance website.

When filling it out, have your certificate of tax credit on hand, since you’ll need the exact certified amount issued by Empire State Development. The form walks you through calculating your allowable credit for the year, applying any prior-year carryforward amounts, and determining how much remains unused for future tax years.

Because this credit involves entity-level allocations in many cases, double-check whether you’re filing as an individual, partnership, or corporation, since the instructions include separate guidance depending on your filing status. If you’re also reviewing other New York credit programs this season, it’s worth comparing how pass-through allocations work on similar forms like the Workers with Disabilities Tax Credit (Form IT-644), which follows a comparable certification-then-claim structure.

Businesses that operate across multiple New York incentive programs sometimes qualify for more than one credit in the same tax year. If that applies to you, it may help to also look at the START-UP NY Tax Elimination Credit instructions (Form IT-638) or the Farm Donations to Food Pantries Credit (Form IT-649) to see whether your business activities overlap with other available state credits.

Keep a copy of your completed IT-654 along with your certificate of tax credit and any supporting documentation of production expenditures. New York State can request this backup during processing or in the event of an audit, so it’s not something you want to file away and forget once your return is submitted.