Eligible registered corporations that develop interactive digital media products in BC after August 31, 2010 and before September 1, 2018 can receive a tax credit of 17.5% of eligible salary and wages incurred in the tax year. This credit is available for products developed in BC.
Eligible corporations must meet the following criteria:
An interactive digital media product (IDM product) is intended to be used interactively by an individual, in order to educate, inform or entertain the participant. An IDM product will typically include digital application files and data files that integrate and operate together. Information is presented via text, sound or pictures.
Examples of IDM products include:
The following types of products are not considered IDM products:
For the purposes of the IDMTC, eligible salaries and wages must be:
The corporation must have eligible salaries and wages of at least $100,000 to be eligible for the IDMTC.
The following amounts are excluded from salaries and wages when calculating the tax credit:
Activities performed by employees which are directly attributable to the development of the IDM product. For example, design, artwork, animation and project management.
Eligible activities do not include marketing, human resources, administration and support services or management services.
Register your corporation with the Ministry of Finance for each tax year the IDMTC is to be claimed. The application for registration can be found on the BC Ministry of Finance website. An eligible corporation can register at any time prior to the deadline for claiming the tax credit.
The credit can be claimed up to 18 months after the end of the tax year in which the eligible salaries and wages are incurred. The credit is first applied against tax payable and any portion of the tax credit which exceeds tax payable is fully refundable. The tax credit is claimed on the T2 Corporation Income Tax Return.
A corporation cannot claim both the BC SR&ED tax credit and the IDMTC. Either the BC SR&ED tax credit or the IDTMC can be claimed in a particular tax year. However, a corporation can apply a BC SR&ED tax credit carry-forward from another year in the same year an IDMTC is claimed.