Frequently Asked Questions
What is the local journalist employment credit?
The local journalist employment credit is model legislation that creates refundable state tax credits to support local journalist employment. It provides credits to local news organizations based on the number of journalists they employ, with enhanced support for the smallest newsrooms and additional credits for creating new journalist positions. The model law is designed to be adapted and enacted by individual states. It draws on programs already operating in Illinois and New York state.
What problem is this trying to solve?
The per capita number of local journalists in the United States has dropped 75% since 2002, and the losses continue. Communities that lose local news coverage see lower voter turnout, higher municipal borrowing costs, more government corruption, and weaker civic engagement. This policy provides a stable financial floor to prevent additional layoffs and make new hires possible as local news outlets innovate to meet the changing economic and technological environment.
How much are the credits worth?
The model law provides two types of credits. The retention credit is $20,000 per journalist for the first five positions and $15,000 for each additional journalist. The new hire credit is an additional $15,000 for each net new journalist position. The two credits stack, so a news organization adding a new journalist can receive $30,000 to $35,000 in combined support for the position’s first full taxable year of employment.
What does “refundable” mean?
A refundable tax credit means that if the credit exceeds what the organization owes in taxes, the difference is paid out in cash. This is essential because many local news organizations — particularly nonprofits and small outlets — have little or no tax liability. Think of it as functioning like a grant for organizations that owe less in taxes than the credit is worth.
Who is eligible?
The program is designed to be broad. Eligible local news organizations include print newspapers and magazines, digital news outlets, and broadcast stations — whether they are for-profit businesses, nonprofits, or sole proprietorships. To qualify, an organization must be incorporated or registered to do business in the state, employ at least one full-time journalist working 30 or more hours per week, and meet a set of objective standards including ownership disclosure, maintaining a public error correction policy, and carrying media liability insurance.
Are nonprofit news organizations eligible?
Yes. The model law is specifically structured so that nonprofits benefit on the same terms as for-profit outlets. The credit is applied against employers’ withholdings of personal income taxes on employee wages — a tax obligation that both nonprofits and for-profit businesses share. In states where extending the withholding credit to nonprofits is not administratively feasible, the model law includes an optional grant module that provides equivalent support through direct appropriation. In Illinois, nonprofits were among the program’s largest recipients in its first year.
Are there cases when nonprofits cannot be helped through a tax-code based policy?
Yes, though the model law tries to limit these cases as much as possible. A credit structured against withholding treats commercial and nonprofit newsrooms on equal footing, because nonprofits withhold personal income taxes on their employees’ wages just as any other employer does.
However, a state might choose to apply the credit against corporate income taxes or other business taxes that nonprofits do not pay. In these cases, a nonprofit could still benefit from a refundable credit, but the state may need to set up administrative infrastructure for nonprofits to claim credits against taxes they do not otherwise file.
In some states, political sensitivities or the administrative structure of the tax system may preclude both options. For those cases, the model law’s grant module provides a parallel pathway. It mirrors the credit’s eligibility standards and per-journalist amounts but runs through a direct appropriation rather than the tax code.
Are sole proprietors eligible?
Yes. A sole proprietor can qualify as both the eligible local news organization and the qualifying journalist, provided they meet the same standards as any other applicant — at least 30 hours per week of qualifying work and annualized income of at least $35,000. Because sole proprietors do not withhold payroll taxes on their own income, the credit is applied against their personal income tax liability.
Are cable channels, public access stations, or PEG channels eligible?
Cable-only operations, including PEG (public, educational, and governmental access) channels, do not meet the qualifying broadcast station definition, which is tied to FCC-licensing for over-the-air stations. They may, however, qualify through the digital door. A PEG operation or cable channel that publishes news and information about the state or a local community at least monthly through a website, app, or streaming platform, and that can demonstrate at least 33 percent of its digital audience is located within the state, can enter the program as a qualifying digital news outlet.
PEG operations organized as 501(c)(3) nonprofits can pursue the program on the same terms as other nonprofits, including through the grant module where a state adopts it. PEG operations run directly by a municipality or other governmental unit raise distinct questions about whether a state tax credit or grant can flow to a public entity, and states adopting the model may want to address that question in rulemaking or as part of the legislative process.
Can small, rural, or one-person newsrooms benefit?
Yes, and the program is designed to prioritize them. The tiered retention credit — $20,000 for each of the first five journalists, dropping to $15,000 thereafter — channels proportionally more support to the smallest outlets. A one-person newsroom receives the highest per-journalist rate. In Illinois, two-thirds of recipients in the first year were newsrooms with six or fewer journalists, and a majority were located outside the Chicago metro area.
Do freelancers count?
No. Only full-time employees working at least 30 hours per week for more than 26 weeks with annualized wages of at least $35,000 qualify. Independent contractors and freelancers are not covered. However, the funding that news outlets receive under this program is not restricted and may be used to expand freelance coverage.
What types of journalists qualify?
The model law defines a qualifying journalist broadly to include reporters, correspondents, photographers, videographers, editors, digital producers, and others whose primary job duties involve gathering, preparing, directing the recording of, producing, collecting, photographing, recording, writing, editing, reporting, presenting, or publishing state or local community news. The journalist must reside within 50 miles of the outlet’s coverage area.
How is a “new hire” defined?
A new journalism position is a net increase in qualifying journalist headcount between two taxable years. The organization calculates the number of qualifying journalists they have employed in the taxable year they are applying for and the prior year. Because the calculation uses total headcounts of journalists who have been employed full-time for more than 26 weeks, this approach ensures that seasonal hiring and routine turnover do not count as a new position.
Does this affect employees’ taxes?
No. While the credit mechanism is based on employer withholding of personal income taxes, the credit flows entirely to the employer. Journalists’ personal tax obligations and withholding amounts are not affected.
What safeguards prevent abuse or “pink slime” sites from claiming credits?
The program relies on objective, verifiable standards rather than government editorial judgment. All applicants must publicly disclose their ownership, maintain a corrections policy, and carry media liability insurance. Organizations controlled by political action committees or 501(c)(4) organizations are disqualified. Platform-specific requirements — such as FCC registration for broadcasters, USPS Periodicals permits for print, and audience data for digital outlets — provide further verification. These standards are designed to screen out bad actors without giving any government official discretion over editorial content.
Can this policy apply to new forms of journalism on mediums like Substack or podcasts?
Local news innovators are welcome! What matters isn’t the medium or the business model, however modern or traditional. What matters is that you meet the model law’s objective indicators of seriousness, like employing staff, having media liability insurance and a corrections policy, disclosing your ownership, and being able to demonstrate with data that you have a local audience. We designed this policy to be as inclusive as possible for evolving forms of community media that aspire to be job creators, while protecting the program from abuse or governmental discrimination.
Does the government get to decide what counts as “real” journalism?
No. The qualification standards are deliberately objective and content-neutral. No state official evaluates the quality, viewpoint, or editorial decisions of an applicant. The program asks whether an organization meets verifiable structural criteria — not whether its journalism is good.
Is there a cap on total spending?
The model law includes a placeholder for a Total Program Cap — the aggregate amount that can be distributed in a single year. It also provides for an Individual Outlet Cap and an Affiliated Group Cap to ensure funding is broadly distributed and not absorbed by a small number of large recipients. The specific dollar amounts are left to each state to determine based on its budget, the size of its local news ecosystem, and political feasibility. For reference, Illinois set its total cap at $5 million and New York at $30 million.
What happens if more organizations apply than the funding can cover?
The model law offers two alternative approaches. Under a first come, first served model, applications are processed in order until funding runs out, with unfunded applicants placed on a priority waitlist for the following year. Under a pro rata model, all eligible applicants receive credits reduced by an equal percentage to stay within the cap. Each approach has tradeoffs — first come, first served preserves full credit amounts but excludes some applicants; pro rata includes everyone but risks diluting credits below a meaningful level. States can also adopt a blended approach, as New York has done.
Does receiving the credit affect other grants, donations, or public funding?
No. The credit is independent of other revenue sources. Receiving it does not restrict an organization’s eligibility for philanthropic funding, advertising revenue, or other public programs. In fact, under this program, a non-profit publisher could tell a funder that up to $35,000 in matching public dollars are available if the funder provides seed funding to help hire a new reporter to cover the local school board.
How long does the program last?
The model law recommends a program duration of at least five years to provide stability for newsrooms making employment decisions based on the credit. The specific start and end dates are set by each state. Continued availability beyond the initial authorization depends on legislative reauthorization and appropriations.
Has this been tried before?
Yes. Illinois enacted the first state-level journalist employment tax credit in 2024 and distributed over $4 million in its first year, supporting more than 260 journalist positions at over 120 local outlets. New York has enacted a similar program with a $30 million annual cap, and New Mexico recently approved a new program to go into effect in 2027. The model law builds on these programs and incorporates lessons from their early implementation. We expect this policy to evolve as we continue to learn from real-world experiences and outcomes.
Does the model law need to be adopted exactly as written here?
No. It is designed to be adapted, though any changes should take in consideration the core policy goals behind the design decisions: a formula-based, refundable credit tied to journalist employment, with objective eligibility standards and protections for editorial independence. States differ in their tax systems, budget processes, administrative capacity, and the composition of their local news ecosystems. The credit amounts, cap levels, application procedures, administering agency, and allocation method can all be adjusted.
Where can I learn more about how existing programs have worked?
Rebuild Local News has published an in-depth analysis of the first year of the Illinois program here.
NEXT: Our Process