If your business builds video games, educational software, or other interactive digital products in B.C., development costs add up fast. The BC Interactive Digital Media Tax Credit (BC IDMTC) helps cover those costs with a refundable provincial tax credit tied directly to eligible labour spending. It’s one of the most important funding tools for B.C.’s digital media sector. You claim it through your corporate tax return, not a competitive application process.
The BC Interactive Digital Media Tax Credit is a refundable corporate income tax credit for companies that develop interactive digital media products in British Columbia. If you qualify, the province refunds a percentage of your eligible B.C. labour costs—even if you owe no corporate tax.
Key features:
To claim the BC Interactive Digital Media Tax Credit, both your company and your product must qualify.
Your business must:
Your product must be an interactive digital media product, which means it:
Common examples:
The credit does not apply to products that are mainly:
The BC IDMTC is worth 25% of eligible B.C. labour expenditures incurred during the tax year.
Eligible labour costs include:
There is no maximum funding cap per project or per company. The refund depends entirely on your eligible labour spend.
Example:
If your studio incurs $400,000 in eligible B.C. labour costs, the credit could refund $100,000.
You claim the credit when you file your corporate taxes. There is no separate application.
Track eligible labour costs
Keep detailed payroll records tied to development work in B.C.
Complete the required tax schedules
Include the BC IDMTC forms with your T2 corporate income tax return.
File your return with CRA
CRA administers the claim on behalf of B.C.
Receive your refund
If approved, the credit is paid even if you owe no tax.
Most businesses work with an accountant familiar with B.C. tax credits to avoid delays or reassessments.
The BC Interactive Digital Media Tax Credit can often be combined with other incentives, including:
You cannot claim the same labour dollars twice. You must keep your costs separate for each program.
GrantHub’s eligibility matcher can help you filter programs by province and industry, especially when stacking tax credits with non-repayable grants.
Including non-development wages
Marketing, admin, and sales labour usually do not qualify.
Missing B.C. permanent establishment rules
Remote teams outside B.C. can invalidate part of your claim.
Assuming contractors always qualify
Many contractor costs are excluded unless structured correctly.
Waiting until tax time to organize records
Poor documentation is a leading cause of reassessments.
Q: Is the BC Interactive Digital Media Tax Credit refundable?
Yes. The credit is fully refundable, meaning you can receive a payment even if your business owes no corporate income tax.
Q: Can startups with no revenue claim the BC IDMTC?
Yes. As long as you are an eligible corporation with qualifying labour costs, revenue is not required.
Q: Does the credit apply to mobile games and apps?
Yes, if they meet the definition of an interactive digital media product and are not primarily promotional or advertising-based.
Q: Can I claim the BC IDMTC and SR&ED together?
Often yes, but the same labour expense cannot be used for both credits. Proper cost allocation is essential.
Q: Is there a deadline to apply?
You must claim the credit when filing your corporate tax return for the year the expenses were incurred. Standard CRA filing deadlines apply.
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