Ontario Interactive Digital Media Tax Credit

Ontario Interactive Digital Media Tax Credit

The Ontario Interactive Digital Media Tax Credit (“OIDMTC”) program is for Canadian or foreign-owned, Canadian corporations who are developing interactive digital media products at a permanent establishment in Ontario using employees that reside in the province of Ontario.

Program highlights

Funding Type: Fully Refundable Tax Credit

Funding Amount:

• 35-40% of eligible costs
• Eligible costs may include labour (both employee and subcontractors) and marketing & distribution costs. There is no cap on labour costs but marketing & distribution costs are capped at $100,000
• Labour costs from 37 months prior to product completion and marketing & distribution costs from 24 months prior to product completion and 12 months after product completion may be claimed

Requirements:

• For interactive digital media products intended to present entertainment content or educational content for children under 12, using 2 of text, images, or sound in a completed, shelf-ready product
• Products are content-driven, and the user has control over the way the content unfolds
• Special rules apply for gaming companies, e.g., rights ownership, completion not required, cost thresholds   

Eligibility:

• Who is Eligible?
  • Canadian or foreign-owned Canadian corporations
  • Develops an eligible product at a permanent establishment in Ontario
  • Files an Ontario Tax Return
• Product Requirements:
  • All or substantially all of the product must be developed in Ontario (80/25% rules)
  • Developed for sale or license, and the product has a revenue stream
  • Not primarily for interpersonal communication
  • Not used to primarily promote or present the qualifying corporation or its products or services

Application:

• All products completed in a given fiscal year are included in the same application. Special rules apply for gaming companies
• Applications, along with required documentation, are submitted to Ontario Creates, a division of the Ministry of Culture, no later than 18 months after the fiscal year end
• Once applications are approved by Ontario Creates, an amended corporate tax return (T2) is submitted to CRA.  Like all credits, CRA may review or audit the expenditures
• If approved by CRA, the cheque/auto-deposit is issued within approximately 2-8 weeks.