Interactive Digital Media Tax Credit (IDMTC)
The interactive digital media tax credit (IDMTC) is for eligible registered corporations that develop interactive digital media products.
The tax credit rate is 25% of eligible salary and wages incurred after August 31, 2025, and 17.5% of eligible salary and wages incurred before September 1, 2025.
Offered by Ministry of Finance
Amount
25% of eligible salary and wages incurred after August 31, 2025 (17.5% of eligible salary and wages incurred before September 1, 2025); fully refundable, first applied against total income tax payable
Quick eligibility check
Who can apply
- Your corporation must register with the Ministry of Finance for each tax year that it wants to claim the Interactive Digital Media Tax Credit (IDMTC)
- Each year, corporations must meet certain requirements to register for the IDMTC
- A corporation can register for a tax year if, in that tax year: It has a permanent establishment in B.C. It is a taxable Canadian corporation throughout the year
- Eligible salary and wages are: At least $2,000,000, or Are between $100,000 and $2,000,000 and either one or both of the following applies
- Are between $100,000 and $2,000,000 and either one or both of the following applies: Its principal business is developing interactive digital media products; All or mostly all of its business consists of providing eligible activities to a corporation that has a permanent establishment in B.C. and whose principal business is developing interactive digital media products or whose eligible salary and wages are at least $2,000,000
- Total eligible salaries and wages for the year must be greater than $100,000 (pro-rated for short tax years) to be eligible to register for the IDMTC
- An interactive digital media product (IDM product) is designed to be used interactively by an individual and: Consists of a combination of application files and data files, in a digital format, that are integrated and are intended to be operated together; Is designed primarily to educate, inform or entertain the user; Is intended to be used interactively by individuals, and; Is developed in British Columbia
- Is capable of presenting information in at least two of the following forms: Text; Sound; Images
- But does not include a prescribed product
- Effective September 1, 2024, products that enable gambling with currency do not qualify as interactive digital media products
- When you register for the interactive digital media tax credit (IDMTC), you must include your application fee as part of your registration
- Your corporation’s application fee is based on the number of employees at the end of the corporation’s previous taxation year: 0 – 4 employees: $1,000; 5 – 9 employees: $2,500; 10 or more employees: $5,000
- Your corporation must claim the credit with the Canada Revenue Agency no later than 18 months after the end of the tax year in which the eligible salaries and wages are incurred
Who can't apply
- A corporation cannot register for a tax year if, for that tax year, it: Is a labour-sponsored venture capital corporation; Has a registered employee share ownership plan; Is a registered employee venture capital corporation; Is a registered small business venture capital corporation; Is controlled, directly or indirectly in any manner whatever, by one or more of the above corporations; Claims a B.C. scientific research and experimental development (SR&ED) tax credit (you can only claim either the IDMTC or BC SR&ED tax credit for any tax year, not both); Carries on a personal services business
About the funding
The tax credit rate is 25% of eligible salary and wages incurred after August 31, 2025, and 17.5% of eligible salary and wages incurred before September 1, 2025.
The credit is fully refundable, but it is first applied against total income tax payable. There are no carry-back or carry-forward provisions.
Eligible activities are the activities undertaken by the corporation that are attributable to the development of an IDM product. Examples of eligible activities include design, artwork, animation and project management.
IDMTC eligible salaries and wages must be all of the following:
Show all funding details
- Paid to individuals who were resident in B.C. on December 31 of the year preceding the end of the corporation's tax year
- Directly attributable to eligible activities
Only the portion of an employee’s salary and wages that is directly attributable to eligible activities may be included. For example, if an employee works 70% of the time on non-eligible activities, then only 30% of the employee’s salary and wages would be considered directly attributable to eligible activities. The allocation method used must be reasonable, clearly documented and applied consistently.
Total eligible salaries and wages for the year must be greater than $100,000 (pro-rated for short tax years) to be eligible to register for the IDMTC.
The IDMTC is calculated based on eligible salaries and wages minus any assistance, other than federal scientific research and experimental development (SR&ED) tax credits, received or expected to receive.
Claimed through the Canada Revenue Agency on your corporate tax return.
