If you have clients in the digital media industry they could be eligible for a tax credit. The government of Canada provides tax credits for digital media projects such as game development, educational software, animated simulators and more.
Digital media tax credits are offered for qualifying companies permanently located in the provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec, Nova Scotia, and Prince Edward Island.
What Can You Claim?
Depending on the province IDMTC provides a refundable 17.5%-40% tax credit on eligible salary and wages involved in creating interactive digital media (IDM) products. The credit is fully refundable but is first applied to income tax payable.
A qualifying IDM product should be designed to be used interactively by an individual, and consist of a combination of files that are digitally integrated and are intended to be operated together.
Qualifying products must also either educate, entertain, or inform using at least two of the following: text, sound, and/or images. Examples of eligible IDM products includes:
- Video games
- Educational software
- Entertainment (or edutainment) software
- Simulators, such as driving a car
Blogs, online magazines and newspapers, slideshows, videos or presentations that are not made to be used interactively do not qualify.
Who Can Claim It?
Digital media tax credits are offered for qualifying companies permanently located in the provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec, Nova Scotia, and Prince Edward Island.
When Should You Submit a Claim?
Similar to the SR&ED tax credit, your deadline to file IDMTC is 18 months past fiscal year end.
If you or any of your clients may benefit from the Interactive Digital Media Tax credit please reach out to us if you would like to discuss further.