Ontario Interactive Digital Media Tax Credit Calculator
A refundable credit on Ontario labour for game studios, app developers and animation houses. Work out the rate that applies, the refundable amount, how it sits against SR&ED, and the certification you need.
refundable credit
—
—
—
—
The Calculation
| Item | Basis | Amount |
|---|
OIDMTC Against SR&ED
| Feature | OIDMTC | SR&ED |
|---|
Certification and Filing
| Step | Detail |
|---|
Points That Decide This
What to Do Next
—
Disclaimer: The Ontario Interactive Digital Media Tax Credit is a refundable credit administered jointly by Ontario Creates, which issues the certificate of eligibility, and the Canada Revenue Agency, which administers the claim through the corporate tax return. The credit is generally available to a qualifying corporation that is a Canadian corporation with a permanent establishment in Ontario, that files an Ontario corporate tax return, and that develops an eligible product meeting the statutory definition of an interactive digital media product. Rates are applied here at 40% of qualifying expenditures for non-specified products developed by the corporation for sale or licence to arm’s length parties, and 35% for specified products developed under a fee-for-service arrangement, with a separate rate applying to qualifying digital game corporations meeting the applicable conditions. Eligible labour must relate to Ontario employees and eligible remuneration to arm’s length individuals and corporations, and labour performed outside Ontario does not qualify. Marketing and distribution expenditures are eligible only for non-specified products and are subject to a statutory cap. Certain products are excluded from eligibility, including products used primarily for interpersonal communication, products used primarily to present or promote the corporation itself, and certain blogs, news, public affairs, opinion and advice products. An expenditure claimed under OIDMTC and also claimed as a scientific research and experimental development expenditure is subject to grind and anti-duplication rules, and government assistance reduces the pool. Every rate, cap, definition and condition should be confirmed against the current legislation and Ontario Creates guidelines before a claim is prepared, as eligibility is fact-specific and the program has been amended over time. Figures produced here are indicative planning estimates only. This page is general information, not tax advice.
Refundable Is the Word That Matters
OIDMTC is refundable. A pre-revenue studio with no tax payable still gets a cheque. For a game company burning through a development cycle with nothing shipped, that is the difference between a credit and cash.
At forty percent of qualifying Ontario labour it is one of the most generous provincial credits in the country, and it is materially under-claimed by smaller studios who assume it is only for large productions.
A three-person studio spending $300,000 on Ontario salaries is looking at a six-figure refundable credit. That is not a rounding item on a small studio’s runway, and it is why the certification work is worth doing properly rather than skipping.
Specified or Non-Specified Decides the Rate
The distinction is who owns the product and who it is being made for.
| Non-Specified | Specified | |
|---|---|---|
| What it is | Your own product for sale or licence | Developed under contract for someone else |
| Rate | 40% | 35% |
| Marketing eligible | Yes, subject to a cap | No |
| Timing | Claimed after completion | Claimed on the fee-for-service work |
A studio doing both should track them separately from the start, because trying to separate the labour retroactively across a year of timesheets is painful and the certification process will ask.
Labour Outside Ontario Does Nothing
This catches distributed studios hard. The credit is on Ontario labour. A developer in Vancouver or Manila contributes nothing to the claim regardless of how central they are to the product.
For a studio deciding where to place its next hires, that is a real financial input. Forty percent of an Ontario salary back as cash changes the comparison against a cheaper remote hire more than most founders expect.
Some products are excluded outright. Products used primarily for interpersonal communication, products that primarily promote the corporation itself, and certain news, blog, opinion and advice products fall outside the definition. A studio building a marketing tool for its own brand is not making an eligible product.
You Cannot Claim the Same Dollar Twice
OIDMTC and SR&ED overlap for studios doing genuine technical development, and the same salary dollar cannot sit in both claims. Anti-duplication and grind rules apply, and government assistance reduces the pool.
For most interactive media companies OIDMTC is the better home for the bulk of development labour, because it covers the whole product rather than only the experimental portion and the rate is higher. SR&ED then covers genuinely experimental work that falls outside the product.
| OIDMTC | SR&ED | |
|---|---|---|
| What it rewards | Developing the product | Resolving technological uncertainty |
| Scope of labour | The whole product | Only the experimental work |
| Refundable | Yes | Depends on the corporation |
| Certification | Ontario Creates certificate needed | No pre-certification |
Most studios should look at both and split deliberately. Doing one and ignoring the other is the common mistake, and doing them without a plan for which dollar goes where creates a mess at claim time.
Animation May Belong Somewhere Else
Ontario runs a separate credit for computer animation and special effects. A studio doing animation or visual effects work should look at whether OCASE fits better before assuming OIDMTC is the answer.
They are different programs with different conditions, and picking the wrong one wastes the certification effort. Worth deciding before the work starts rather than at year end.
The Certificate Is the Long Pole
OIDMTC runs through two bodies. Ontario Creates issues the certificate of eligibility, and the CRA administers the claim through the corporate return.
- Track Ontario labour separately from the first day of development
- Keep the product documentation that shows what was built and when
- Apply to Ontario Creates for the certificate of eligibility
- Claim through the corporate return once the certificate is issued
- Expect the certificate to take time, and plan cash flow accordingly
The timesheet discipline is what separates a smooth claim from a painful one. Studios that reconstruct labour allocation after the fact spend more on the claim and get a worse result.
What This Calculator Does Not Cover
- Whether your product meets the definition, which is fact-specific
- The qualifying digital game corporation streams and their conditions
- OCASE, the animation and special effects credit
- The exact marketing cap, which should be confirmed
- Government assistance and its effect on the pool
- Federal credits beyond SR&ED
Set the tracking up before development, not at year end. Our tax credit service covers the OIDMTC claim, the SR&ED split and the certification.
Frequently Asked Questions
Common questions on the OIDMTC.
Related Calculators and Guides
More tools for technology corporations.
Set the Tracking Up Before Development
Tell us what you are building and where your team sits. We will confirm the stream, set up the labour tracking, split OIDMTC and SR&ED deliberately, and handle the certification and the claim.