Interactive Digital Media Tax Credit (IDMTC)
Up to 40% refundable tax credit on digital media labour costs
Overview
35–40% back on developer salaries — if you're building interactive digital products
IDMTC is a provincial tax credit for companies developing interactive digital media products. Ontario offers 40% of eligible labour, BC offers 17.5%. This is separate from SR&ED — you can stack both.
The key word is 'interactive.' Your product must involve user interaction — games, apps, simulations, educational software. A static website doesn't qualify, but a SaaS platform with user-driven workflows likely does.
IDMTC is underused by tech companies because most don't realize their products qualify. If your developers are building anything users interact with, check eligibility.
Who Qualifies
Hard Gates — Must Have
Interactive product
Must be developing an interactive digital media product (not static content)
BC or Ontario corporation
Company must be taxable in BC or Ontario
Labour expenses
Must have Canadian employees working on eligible products
Soft Gates — Nice to Have
Ontario location
Ontario rate: 40% (vs BC's 17.5-25%)
Original IP
Must be developing original content, not porting/localizing
How Much
Range
17.5% – 40% of eligible labour
Rate
Ontario: 40%, BC: 17.5-25%
Example Recovery
$200K IDMTC credit
Applied to Canadian employee salaries working directly on eligible interactive digital media products. Contractors don't qualify — must be on payroll.
Worked Example
Your spend
$500K in developer salaries (Ontario)
You recover
$200K IDMTC credit
Note
40% of $500K eligible Ontario labour
Application Process
Determine eligibility
Confirm your product is 'interactive digital media' under provincial definitions.
Track labour allocation
Document which employees spend time on eligible products and how much.
Apply through provincial body
Ontario: OMDC/Ontario Creates. BC: Creative BC.
Certificate issuance
Provincial body reviews and issues tax credit certificate.
Claim on tax return
File the credit with your corporate tax return.
Common Mistakes
Missing the 'interactive' requirement
Static websites, content portals, and data dashboards may not qualify. The product must involve meaningful user interaction.
Including contractor costs
Only employees on payroll qualify. Contractor and freelancer costs are excluded.
Not tracking time allocation
You need to prove what percentage of each developer's time went to the eligible product. Start tracking before you apply.
Key Deadlines
Claim deadline
18 months after fiscal year end
Same retroactive window as SR&ED — don't let eligible years expire
Check if you qualify for Interactive Digital Media Tax Credit (IDMTC)
32+ programs. 2-minute scan. See your eligibility, estimated recovery, and recommended next steps.