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.