OIDMTC: Ontario Interactive Digital Media Tax Credit

What Is the OIDMTC?

The Ontario Interactive Digital Media Tax Credit (OIDMTC) is a refundable corporate income tax credit offered by the Province of Ontario to encourage the development of interactive digital media products in the province. Administered by Ontario Creates, OIDMTC is one of Canada's most generous incentives for tech companies building software products.

Unlike SR&ED, which focuses on experimental development and technological uncertainty, OIDMTC is a production-focused credit. It rewards the actual creation of interactive digital media products, regardless of whether the underlying technology involves novel research. This makes OIDMTC accessible to a broader range of software companies, including those building products using established technologies in new or innovative ways.

The credit is worth 40% of eligible Ontario labour expenditures and is fully refundable, meaning you receive the credit even if your corporation has no Ontario tax payable. For growing tech startups and scale-ups, this translates into substantial cash flow that can be reinvested into product development and hiring.

OIDMTC Eligibility Requirements

To qualify for the OIDMTC, your company and product must meet several core requirements. These criteria are assessed by Ontario Creates when you apply for your Certificate of Eligibility.

Additionally, the product must not fall into one of the excluded categories (see below). Ontario Creates reviews each application on its merits and may request additional documentation or a product demonstration to confirm eligibility.

What Qualifies as Interactive Digital Media

The definition of “interactive digital media product” is broad and covers many types of software products that Ontario tech companies build. If your product allows users to interact with it and make decisions that influence their experience, it likely qualifies. Here are common examples:

• SaaS platforms — Business software with interactive dashboards, user-configurable workflows, and data-driven decision tools. CRM systems, project management tools, analytics platforms, and HR tech all qualify.
• AI-powered applications — Machine learning platforms, natural language processing tools, computer vision systems, and AI-driven recommendation engines where users interact with and influence the AI's output.
• Mobile and web applications — Consumer and enterprise apps with interactive features, including fintech apps, health tech platforms, marketplace applications, and social platforms.
• Video games — Interactive entertainment products including mobile games, console games, PC games, and VR/AR experiences developed by Ontario studios.
• E-learning and EdTech — Interactive educational platforms, courseware with adaptive learning paths, simulations, virtual labs, and gamified training tools.
• Interactive data visualization — Platforms that allow users to explore, filter, and interact with datasets. Business intelligence tools, geospatial platforms, and scientific visualization software.
• IoT and connected device interfaces — Software applications that provide interactive control and monitoring of connected devices, including smart home platforms, industrial control dashboards, and fleet management systems.

What Does Not Qualify for OIDMTC

Certain types of products and activities are explicitly excluded from the OIDMTC. Understanding these exclusions early can save you time and effort in the application process.

• Static or informational websites — Brochure-style websites, content-only blogs, and marketing landing pages that do not provide meaningful user interaction beyond navigation.
• Internal-use tools — Software developed solely for internal business operations and not intended for external users or customers. The product should be designed for use by parties other than the developing corporation.
• Search engines and portals — Products whose primary function is to aggregate and redirect users to third-party content without providing a unique interactive experience.
• Online gambling products — Internet gambling platforms and related digital products are excluded from the credit.
• Products with primarily promotional content — Interactive media developed primarily to promote or advertise a product, service, or brand (e.g., advergames or branded apps).

If you're unsure whether your product qualifies, Ontario Creates offers pre-consultation calls where you can discuss your product before submitting a formal application. We also recommend speaking with an OIDMTC-experienced tax advisor.

How to Calculate Your OIDMTC Credit

The OIDMTC credit is calculated as a percentage of your eligible Ontario labour expenditures. Here is how the calculation works:

Example Calculation

Suppose your Ontario-based SaaS company has a 10-person development team working on a qualifying interactive platform. Their total annual salaries amount to $1,200,000, and all team members are Ontario-based.

That is $480,000 in refundable tax credits returned to your company. For a growing startup, this can represent a significant reduction in your effective labour costs and a meaningful boost to your runway.

OIDMTC Application Process

The OIDMTC application process involves two stages: certification by Ontario Creates and claiming the credit on your tax return.

1. Register with Ontario Creates — Create an account on the Ontario Creates portal. If this is your first OIDMTC claim, you will need to provide corporate documentation including your articles of incorporation, Ontario business registration, and a description of your product.
2. Submit your application — Complete the OIDMTC application form through the Ontario Creates portal. You will need to describe your product, demonstrate its interactive elements, provide the total and Ontario-specific labour expenditures, and confirm the 25% Ontario content threshold is met.
3. Product review and certification — Ontario Creates will review your application and may request additional information, a product demonstration, or supporting documentation. Once approved, you receive a Certificate of Eligibility for the specific product and tax year.
4. File your tax return — Include the OIDMTC claim on your Ontario corporate income tax return (CT23). Attach the Certificate of Eligibility issued by Ontario Creates. The credit is calculated on Schedule 554 of the CT23 return.
5. Receive your refund — Since the OIDMTC is refundable, the credit amount is applied against your Ontario tax payable, and any excess is refunded to your corporation.

Timing: You should submit your application to Ontario Creates before filing your corporate tax return. Applications are typically processed within 8 to 12 weeks, though complex applications or first-time claims may take longer. We recommend applying well in advance of your corporate tax filing deadline.

For full application details, visit the Ontario Creates OIDMTC page.

Stacking OIDMTC with SR&ED and IRAP

One of the most powerful strategies for Ontario tech companies is stacking multiple funding programs. OIDMTC can be combined with both the SR&ED tax credit and NRC IRAP funding, though there are important rules about double-dipping.

OIDMTC + SR&ED

You cannot claim both OIDMTC and SR&ED on the same labour expenditures. However, you can allocate different portions of an employee's time to each program. For example, if a developer spends 60% of their time on routine product development (OIDMTC-eligible) and 40% on experimental development resolving technological uncertainty (SR&ED-eligible), you can split their salary accordingly.

This stacking strategy requires careful time tracking and documentation. Many Ontario tech companies use project codes or time-tracking tools to allocate hours between SR&ED and OIDMTC-eligible activities. An experienced tax advisor can help you structure this allocation to maximize your combined credits.

OIDMTC + NRC IRAP

NRC IRAP provides non-repayable contributions that offset salary costs for innovation projects. When you receive IRAP funding, the IRAP-funded portion of salaries is excluded from your OIDMTC eligible labour expenditure. This prevents double-dipping but still allows you to benefit from both programs. You receive the IRAP contribution directly and claim OIDMTC on the remaining non-IRAP-funded labour.

Maximizing Combined Benefits

A typical Ontario SaaS company with $1.5 million in annual development salaries might structure their funding as follows:

• $300,000 allocated to SR&ED-eligible experimental development (yielding approximately $102,000 in combined federal/Ontario SR&ED credits for CCPCs)
• $400,000 funded through NRC IRAP (direct non-repayable contribution)
• $800,000 remaining eligible for OIDMTC (yielding $320,000 in refundable tax credits)

In this scenario, the company recovers $822,000 against $1.5 million in development salaries — an effective 55% recovery rate. This is the power of strategic grant stacking, and it is available to many Ontario tech companies that are not currently taking advantage of it.