Interactive Digital Media Tax Credit
Eligibility & Details
What this program funds and who can apply
Program Description
British Columbia's Interactive Digital Media Tax Credit is a refundable 25% credit on eligible BC-resident salaries and wages for corporations developing interactive digital media products such as video games, educational software, and VR/AR applications — the rate was permanently increased from 17.5% effective September 1, 2025. Eligible companies must have at least $100,000 in BC-resident eligible wages and must register annually through eTaxBC before claiming on their T2 return.
Eligibility Requirements
- Incorporated corporation (not a sole proprietor or partnership)
- Developing interactive digital media products in British Columbia (video games, educational software, VR/AR applications)
- At least $100,000 in eligible BC-resident wages during the tax year
- Principal business must be IDM development OR at least 51% of gross revenue derived from IDM development
- Register annually through eTaxBC before claiming the credit
- Products are interactive (passive streaming video, blogs, or online magazines are ineligible)
- Application fee paid to BC ($1,000–$5,000 per year depending on employee count)
Quick Assessment
Funding Details
- Amount
- 25% of eligible BC salaries and wages (effective September 1, 2025; permanent)
- Type
- Tax Credit
- Level
- Provincial
- Co-Funding
- Up to 25% of eligible costs
- Deadline
- Ongoing
Program Scorecard
Competition, effort, and approval at a glance
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How to Win
Insider tips, common pitfalls, and what successful applicants look like
Insider TipThe strategic play is to claim BC IDMTC (25%) provincially AND federal SR&ED on the same expenditures — these two programs can be stacked and the combined benefit is significantly higher than either alone. However, you CANNOT also claim BC provincial SR&ED; for the vast majority of IDM companies, BC IDMTC at 25% outperforms BC SR&ED at 10%, so the choice is easy. Register on eTaxBC for each tax year you plan to claim — many companies miss credits by not registering on time. Maintain meticulous time-tracking records (spreadsheet or time-tracking software) showing exactly which employees spent what percentage of their time on eligible IDM activities vs. ineligible activities like marketing or admin; CRA audits focus heavily on this allocation. Also: the $1,000–$5,000 annual registration fee is non-refundable even if your claim is denied, so confirm eligibility before registering.
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Rejection Pitfalls 10
- Product fails the 'interactive' test — blogs, online magazines, streaming video, social media, slideshows are explicitly excluded
- Product enables gambling with currency (excluded as of September 1, 2024)
- Eligible wages under $100,000 threshold for the tax year
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Success Profile
BC corporation (or foreign company with BC permanent establishment) actively developing interactive digital media products: video games, educational software, e-learning platforms, VR/AR applications, or interactive training tools. Must pay BC-resident employees. Total eligible BC salary/wages must exceed $100,000/year. Principal business is IDM development, OR 51%+ of gross revenue comes from IDM development. Studio has documentation systems in place (time-tracking, payroll records). Typically: game development studios, edtech companies, simulation/training software firms, VR/AR developers. Vancouver studios at all stages claim this — from 3-person indie studios to 200+ person AAA studios.
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Evaluation Criteria
Two-stage formula-based entitlement. Stage 1: Annual eTaxBC registration — BC Income Taxation Branch verifies that the corporation meets the principal business test (IDM is principal business) or the 51%+ revenue test, and that the products being developed are eligible interactive digital media (not passive content, gambling, or social media). Stage 2: CRA T2 processing — verifies the wage calculation and time-allocation documentation. Not a merit-based competition.
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Application Playbook
Step-by-step process, required documents, and expenses
Application Steps
Required Documents 8
Eligible Expenses 3
- Salaries and wages paid to BC-resident employees spending 90%+ of their working time on eligible IDM development activities
- Eligible IDM development activities include: game design and programming, interactive educational software development, VR/AR application development, interactive training tool development
- Employer-paid CPP and EI contributions on eligible wages
Ineligible Expenses 8
- Contract labour from non-employee workers (only employee wages qualify)
- Wages for marketing, promotion, and advertising activities
- Wages for administration and HR activities
- Wages for management activities not directly related to development
- Wages for quality assurance of non-eligible products
- Wages paid to non-BC-resident employees
- Wages for gambling-related product development (as of September 1, 2024)
- Wages below the $100,000 minimum threshold for the tax year
Intake Periods
Annual registration required via eTaxBC for each tax year. No program-level intake windows — program is permanent with no expiry date.
Deadline Notes
Program is now permanent (no expiry date) as of March 2025 announcement. Annual registration must be filed via eTaxBC for each tax year. Credit must be claimed with CRA no later than 18 months after fiscal year-end. Application fee must be paid per year.
Open Application Portal →Ineligible Organizations
- Corporations whose principal business is not IDM development and which earn less than 51% of gross revenue from IDM development
- Corporations developing primarily passive content (streaming video, blogs, online magazines, slideshows)
- Corporations developing products that enable gambling with real currency
- Corporations developing primarily social media or person-to-person communication products
- Corporations without BC-resident employees or without a BC permanent establishment
- Sole proprietors, partnerships, and individuals (corporations only)
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Funding Stack Strategy
Compatible programs, clawback risk, and combined funding potential
Compatible Programs
Clawback Risk
Low RiskLow. IDMTC has no clawback provision for post-period relocation or business changes. Risk is limited to annual reassessment if CRA or BC Income Taxation Branch audits the wage allocation methodology. No multi-year clawback exposure.
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How Interactive Digital Media T... Compares
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