Interactive Digital Media Tax Credit (BC, Manitoba, NL): How to Apply

If your Canadian business develops games, apps, or other interactive digital products, you may qualify for provincial tax credits that cover a portion of your payroll costs. British Columbia, Manitoba, and Newfoundland and Labrador each offer an Interactive Digital Media Tax Credit. These programs refund a percentage of eligible Canadian labour expenses. Rules differ in each province. Missing a step can delay or reduce your claim.

Below is a province-by-province guide. It explains how to apply, who qualifies, and what costs you can claim. The information uses current Canadian government program data.

How the Interactive Digital Media Tax Credit Works (By Province)

British Columbia: Interactive Digital Media Tax Credit (IDMTC)

British Columbia offers a refundable corporate income tax credit to Canadian companies that develop eligible interactive digital media products in the province.

Funding amount

The credit covers 17.5% of eligible salary and wages incurred before September 1, 2025.
After August 31, 2025, the rate increases to 25% of eligible salary and wages.

Who is eligible Your business must:

Be a registered Canadian corporation
Develop interactive digital media products in British Columbia
Produce products designed to educate, inform, or entertain
Provide content in at least two forms: text, sound, or images
Ensure the product is interactive (user-controlled, not passive)

Ineligible products include:

Blogs and online newspapers
Video streaming platforms
Slide shows or PowerPoint-style presentations
Gambling products involving currency

How to apply

There is no pre-approval step in BC.
Claim the credit when filing your T2 corporate income tax return with the Canada Revenue Agency.
Submit the required provincial schedules with your return.

GrantHub’s eligibility matcher can help you filter Canadian digital media tax credits by province and product type.

Manitoba: Interactive Digital Media Tax Credit (MIDMTC)

Manitoba’s program is generous, but it has strict requirements.

Funding amount

40% of eligible Manitoba labour wages
Maximum $500,000 per project

Reduced rate

35% credit if less than 25% of wages go to Manitoba residents, but the company spends at least $1 million per year on qualifying Manitoba labour.

Who is eligible

A taxable Canadian corporation
Has a permanent establishment in Manitoba
Interactive digital media must be non-linear and user-controlled
Product must be developed for commercial market use

Important application rule

You must apply for and receive a Certificate of Eligibility before project work begins. Starting development before approval can make your project ineligible.

How to apply

Apply for a Certificate of Eligibility before starting any development work.
Complete your project and track eligible Canadian labour costs.
Claim the credit when filing your Manitoba corporate tax return.

Newfoundland and Labrador: Interactive Digital Media Tax Credit

Newfoundland and Labrador offers a refundable credit tied to labour costs.

Funding amount

40% refundable tax credit on eligible labour costs

Who is eligible

Canadian corporations producing interactive digital media in Newfoundland and Labrador
Labour costs must be directly related to product development

How to apply

Claim the credit through your provincial corporate income tax return
Provide supporting documentation for Canadian payroll and labour costs

Eligible Costs You Can Claim

In all three provinces, the Interactive Digital Media Tax Credit covers:

Employee salaries and wages paid through Canadian payroll
Employer-paid payroll costs for eligible staff
Labour directly involved in development, design, and production

Marketing, distribution, and general administrative costs are usually not eligible.

Common Mistakes to Avoid

1. Starting work too early in Manitoba

If you begin development before receiving your Certificate of Eligibility, your project may not qualify for the tax credit.

2. Claiming ineligible products

Passive content, such as streaming platforms or digital magazines, often does not meet the “interactive” requirement.

3. Poor labour cost tracking

Incomplete or inaccurate Canadian payroll records can delay or reduce your claim.

4. Missing the BC rate change

Not separating wages incurred before and after August 31, 2025 can result in incorrect credit calculations.

Frequently Asked Questions

Q: Is the Interactive Digital Media Tax Credit refundable?
Yes. In BC, Manitoba, and Newfoundland and Labrador, the credit is refundable. You can receive cash even if your corporation owes no Canadian corporate tax.

Q: Do contractors count as eligible labour?
Most provinces only allow employees on Canadian payroll to qualify. Independent contractors are generally excluded unless specifically permitted by provincial guidelines.

Q: Can startups apply for these credits?
Yes. There is no minimum revenue requirement, but your corporation must be registered in Canada and filing Canadian corporate tax returns.

Q: Can I claim more than one provincial digital media credit?
No. Labour costs must be tied to work performed in a specific province and can only be claimed once.

Q: How long does it take to receive the refund?
Timelines vary, but refunds are usually issued after your Canadian corporate tax return is assessed.

Next Steps

If you are developing interactive digital media in BC, Manitoba, or Newfoundland and Labrador, these tax credits can return up to 40% of your payroll costs. Match your product and timing to the correct provincial rules. GrantHub helps you compare Canadian tax credits, confirm eligibility, and keep track of application requirements as your studio grows.

See also:

Tax Credits vs Grants for Employee Training in British Columbia
Journalism Tax Credits vs Grants in Canada: What Media Businesses Should Know
BC Regional Production Services Tax Credit: Eligibility Explained

Interactive Digital Media Tax Credit (BC, Manitoba, NL): How to Apply