It’s a refundable tax credit provided by certain Canadian provinces (like Ontario, BC, Manitoba, etc.) to support the creation of eligible interactive digital media products — typically video games, e-learning software, and simulation platforms.

Canadian-controlled private corporations (CCPCs) or qualifying corporations with a permanent establishment in a participating province and carrying on eligible IDM activities.

• Video games

• Simulation and training tools

• E-learning platforms

• Educational children’s software

• Interactive media with significant user control/input

• Ontario: Up to 40% of qualifying labour

• BC: 17.5% refundable tax credit on salaries - beginning September 1, 2025 the credit is increasing to 25%

• Manitoba: Up to 40% of eligible salaries, with possible bonuses

• Nova Scotia: 50% of eligible salaries (or up to 25% of total costs)

• Newfoundland: 40% of eligible development costs

You cannot double-dip on the same expenses. However you can claim both credits.

For example, in video game development any employee contributing to the development of the game can be included in the digital media tax credit claim. This would include developers, animators, designers, writers. For SR&ED, the work must be technical and so animators, designers and writers could not be claimed.

To ensure you receive the maximum benefit, it’s important to understand the entire picture and then come up with the right strategy to optimize your claims. We’ll review both types of credits and advise on how to maximize your refund.