The Ontario Interactive Digital Media Tax Credit (OIDMTC) is a refundable tax credit. It is available to corporations that develop interactive digital media products in Ontario.
The Canada Revenue Agency (CRA) administers the program on behalf of Ontario through the federal income tax system.
The Benefit
The benefit is equal to:
- 40% of eligible expenses incurred after March 26, 2009 for corporations that develop their own products
- 35% of eligible expenses incurred after March 26, 2009 for corporations that develop products under a fee-for-service arrangement and
- 35% of eligible expenses incurred after March 26, 2009 for certified game developers.
For corporations that develop their own products, eligible expenses include eligible labour, marketing and distribution expenses used to develop and promote eligible products.
For corporations that develop products under a fee-for-service arrangement, eligible expenses include labour expenses used to develop eligible products.
Eligible expenses include 100% of contractor payments related to the contractor employees' salaries and wages.
For a certified game developer, eligible expenses include Ontario salaries and wages. The developer must incur at least $1 million of Ontario labour expenses per year developing eligible interactive digital media games to qualify.
For expenses incurred after March 26, 2009, digital media game developers with at least $1 million in eligible labour expenses over 36 months can claim the OIDMTC under a fee-for-service arrangement.
Eligibility
To qualify, an eligible corporation
- is a Canadian corporation (that is Canadian or foreign-owned)
- is not exempt from income tax
- is not controlled by another corporation exempt from tax
- develops an eligible product at its permanent establishment in Ontario and
- is not a prescribed labour-sponsored venture capital corporation.
To qualify as a small corporation
- the corporation or associated group must not have gross revenues of more than $20 million, or total assets of more than $10 million for the prior tax year.
How to Apply
Corporations must obtain a Certificate of Eligibility from the Ontario Media Development Corporation (OMDC), and attach it to their T2 Corporation Income Tax Return (T2 return).
Corporations must claim the tax credit on Schedule T2SCH560, and file it with their T2 return.
