Ontario Interactive Digital Media Tax Credit (OIDMTC)
OIDMTC is a refundable digital media tax credit that is jointly administered by the Canada Revenue Agency (CRA) and the Ontario Media Development Corporation (OMDC), and is available to companies engaged in the development of Interactive Digital Media (IDM). The OIDMTC is meant to fund and support IDM development in Ontario through refunding labour and marketing and distribution expenditures directly attributed to IDM product development.
Eligible digital media products will combine technology and content developed by the applicant company, with primary purpose to educate, inform or entertain through the use of at least two of text, image and sound. The IDM product must be user-controlled and not be developed primarily for interpersonal communication. Eligible products include mobile applications, video games, interactive websites, e-learning software and digital magazines, among others.
The OIDMTC is available for products both developed under contract with a client, and developed with no prior arrangement of sale. Tax credits are calculated as 40% of eligible Ontario labour expenditures, which includes 100% of product development salary and subcontracting costs without limit. Companies can also recoup 40% of marketing and distribution expenditures to a maximum of $100,000.
Example of an OIDMTC Return
|Marketing and Distribution||$100,000|
|Total Qualified Expenditures||$500,000|
|Tax Credit (40%)||$200,000|