The Ontario Interactive Digital Media Tax Credit (OIDMTC) is a refundable tax credit administered by the Ontario Media Development Corporation (OMDC) and The Canada Revenue Agency (CRA). The tax credit is based on eligible Ontario labour, marketing, and distribution expenses and can be claimed by a qualifying interactive digital media company. OMDC also offers a number of Ontario business grants to qualifying Ontario firms.
Ontario Interactive Digital Media Tax Credit Details
Calculation of the tax credits depend on two factors:
- Whether the expenses were incurred before or after March 26, 2009
- Whether the expenses were incurred to produce “specified” or “non-specified” interactive digital media products in Ontario. (A “specified product” refers to products developed under a fee-for-service arrangement)
Ontario Interactive Digital Media Tax Credit Amount
For qualifying corporations applying for an OIDMTC on non-specified products with expenditures incurring after March 26, 2009 the OIDMTC is calculated as 40% of eligible labour, marketing & distribution expenses. The rate for qualifying corporations applying for an OIDMTC on specified products for the same period is 35%.
There is no limit on the amount of eligible Ontario labour expenditures which may qualify and there is no per-project or annual corporate limit on the amount of the OIDMTC which may be claimed. Eligible marketing and distribution expenses are capped at $100,000 per non-specified product.
How is the OIDMTC Paid Out?
An application is made to the OMDC for a certificate of eligibility, which the production company files with the Canada Revenue Agency together with its tax return in order to claim the OIDMTC. The amount of the credit, net of any Ontario taxes owing, will be paid to the qualifying corporation. If the qualifying corporation does not owe any taxes, the full amount will be paid out.