The Ontario Interactive Digital Media Tax Credit (OIDMTC) is a refundable tax credit based on eligible Ontario labour, as well as marketing and distribution expenses. Expenditures must be claimed by a qualifying corporation that has developed an interactive digital media product.

The OIDMTC is administered by the Ontario Media Development Corporation under the auspices of the Ontario Ministry of Culture. The claim is reviewed by OMDC and if approved an eligibility certificate is issued to the claimant, which is then included in an amended tax return to receive the benefit.

According to OMDC, to be eligible for the OIDMTC a product must be an interactive digital media product whose primary purpose is to educate, inform, or entertain, and that achieves its primary purpose by presenting information in at least two of: (i) text, (ii) sound and (iii) images. Types of interactive digital media products that may be eligible for the tax credit include, but are not restricted to games, educational and informational products. Operating system software is not eligible for the tax credit.

There are two types of products that can be claimed under the OIDMTC: eligible products and specified products. Specified products are interactive digital media products that are developed under a fee-for-service arrangement, under the terms of an agreement between the qualifying corporation and an arm’s length purchaser corporation for the purpose of sale or license by the purchaser to one or more persons who deal at arm’s length with the purchaser. Eligible products are interactive digital media products that are developed by an Ontario based corporation for the purpose of sale or license by the corporation to one or more persons who deal at arm’s length with the corporation.

The benefit ranges from 20 to 40% of eligible labour, distribution and marketing costs, all dependent on the claiming company’s size, date of product completion, and other factors. For more information see http://www.omdc.on.ca/Page3400.aspx.

Note: Operating systems are not eligible for the OIDMTC tax credit. Operating systems can be considered any sort of program that delivers an application framework but not the actual content. Examples of operating systems can be web hosted Customer Relationship Management (CRM) solutions or even Content Management Systems (CMS).

OIDMTC Rates and Eligibility Periods

*As announced in the March 26, 2009 Provincial Budget

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