Important dates

Intake status: Open – Applications are being accepted until January 31, 2019.
Ministry responsible: Economic Development and Trade

Overview

The  Interactive Digital Media Tax Credit (IDMTC) offers a 25% tax credit for labour costs associated with interactive digital media (IDM) activities to support growth in the interactive digital media industry, encourage corporations to stay in Alberta, and attract talented tech entrepreneurs to the province.

The program is available to corporations whose primary business is the creation and development of interactive digital media and gaming products.

Tax credit amounts are calculated based on a percentage of labour expenses directly attributable to the production of interactive digital media products.

Eligible corporations who hire employees from under-represented groups may also qualify for an additional tax credit of up to 5% of all eligible costs through the diversity and inclusion program component if all conditions are met.

For more information on the program, please refer to:

Funding

Tax credit certificates issued through the IDMTC are refundable.

Eligible salary and wages paid as of April 1, 2018 are eligible for the IDMTC program.

Eligibility

In order to be eligible to register under the IDMTC program, a corporation must:

  • be permanently established in Alberta during the applicable taxation year
  • not be exempt from paying taxes in the taxation year
  • meet either of the following requirements:
    • the corporation's eligible salary and wages is equal to or greater than $2 million, or
    • the corporation's eligible salary and wages is equal to or greater than $50,000 and less than $2 million and the corporation is substantially engaged* in one or both of the following:
      • the development of interactive digital media products
      • the provision of eligible activities to one or more recipient corporations that have permanent establishments in Alberta

*Whether or not a corporation is considered substantially engaged is determined using the formula outlined in section 5(1) of the Interactive Digital Media Tax Credit Regulation.

While corporations that have claimed an Alberta Scientific Research and Experimental Development Tax Credit in the current taxation year are not eligible for the IDMTC, corporations that apply to the IDMTC are eligible to apply to the Alberta Investor Tax Credit program.

Additional information on eligibility criteria, including eligible and ineligible interactive digital media products and ineligible labour expenses, is outlined in the program guidelines.

Diversity and inclusion

Corporations applying for the IDMTC can participate in the diversity and inclusion component of the program, which offers eligible corporations an additional 5% tax credit (calculated on an individual employee basis) for under-represented employees in technical positions.

This component of the program is voluntary and applies to any individual who identifies as:

  • female
  • sexual or gender minority (which includes but is not limited to LGBTQ2S+)
  • person of Canadian Indigenous ancestry
  • person with a long-term or recurring physical or mental disability
  • visible minority

To qualify, in addition to employing under-represented employees, corporations are required to have a public facing diversity and inclusion policy on their website.

Applicants can opt in or out of the diversity and inclusion program component when they submit their application to register with the IDMTC program.

Additional information on the diversity and inclusion program component is outlined in the program guidelines.

How to apply

The IDMTC program will have 2 annual application intake windows for:

  • new corporations to register with the program
  • previously registered corporations to revise their labour forecasts (optional)

Corporations must fill out and submit their applications through the online application portal during an active intake.

Step 1. Read the guidelines

IDMTC program guidelines

Step 2. Create a user account and log in through the online application portal

Online application portal

 

Step 3. Register as an interactive digital media corporation

IDMTC applicants must register with the program by completing and submitting an application through the online application portal. As part of their submission, applicants must provide:

  • a brief overview of the corporation’s business activities
  • the value of assets involved in the development of interactive digital media (IDM) products
  • an overview of IDM products currently in development

Step 4. Submit a labour forecast for conditional approval

Following registration, corporations must submit a labour forecast to receive a conditional approval letter that outlines the conditionally approved tax credit amount. The corporation’s submission must include:

  • a forecast of the corporation’s projected eligible salary and wages (including bonuses) during the fiscal year in which the application is made
  • the eligible salary and wages paid by the corporation in the fiscal year preceding the fiscal year in which the application is made

Step 5. Submit a revised forecast (optional)

Once corporations have successfully registered with the program, they can submit revised forecasts through the online application portal during an active intake period.

Based on the information submitted, the conditionally approved tax credit amount may be revised. Decisions on revised conditional approval letters will not be made until the intake period has closed.

Step 6. Submit actuals to receive a tax credit certificate

In order to receive a tax credit certificate, a corporation is required to submit actual eligible salary and wage expenses.

The following information must be submitted through the online application portal within 90 days of a corporation’s fiscal year end:

  • the total amount of the corporation’s eligible salary and wages, as determined under the Schedule of the Interactive Digital Media Tax Credit Regulation, for the taxation year.
    • For the purposes of the Interactive Digital Media Tax Credit Act, salary and wages must demonstrate that they:
      • are directly attributable to eligible activities
      • are incurred by the corporation in the taxation year on or after April 1, 2018
      • are paid to an individual who was resident in Alberta as of December 31 of the year preceding the taxation year for which a tax credit is claimed under the Income Tax Act  (PDF, 18.9 MB)
      • are included in the cost to, or in the case of depreciable property the capital cost to, the corporation of a property in the taxation year under the Income Tax Act (PDF, 18.9 MB)
      • are deductible as an outlay or expense in determining the income of the corporation for the taxation year under Part 2 of the Income Tax Act (PDF, 18.9 MB)
  • the amount of designated assistance that the corporation received from the Government of Alberta during the taxation year.

Those corporations wishing to remain in the IDMTC program for the following year, will be required to submit a new forecast, similar to the one submitted during registration.

Step 7. Delivery of tax credit certificates

Tax credit certificates will be available for download through the online application portal.

Corporations must submit the certificate with their tax return to claim their refund.

After you apply

Program staff will evaluate applications to ensure they meet the eligibility requirements outlined in the program guidelines.

Contact

To connect with the IDMTC program:

Email: IDMTC.program@gov.ab.ca