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Upcoming Tax Season: Did You Know the Government Will Fund Your Project?

Have you ever heard of OIDMTC? Do you know your website project could be funded by Government of Ontario?  With the Ontario Interactive Digital Media Tax Credit (“OIDMTC”), you can recover up to 40% of your eligible labour expenses and up to $100,000 of your marketing and distribution expenses, which is quite generous. Clearly, the Ontario government wishes to help to retain talent and innovation in digital media businesses.

OIDMTC eligibility extends quite far into the digital media realm:  a product’s primary purpose must be to educate, inform, or entertain, achieving its primary purpose using at least two of the following three categories:  text, sound and images. This makes websites a perfect fit of eligibility. Also, at least 90 per cent of the product must have been developed within corporations filing Ontario tax returns, with employees or contractors working in the province – if you are working with us, that will not be a problem. However, please note that advertisement is not eligible.

As with anything else in life, there is a catch with this offer: you have to apply for the OIDMTC.  The application process includes eighteen separate deliverables which serve to establish whether or not you meet the detailed criteria used by the Ontario Media Development Corporation (OMDC), to determine your eligibility for the OIDMTC. As a result, a professional accountant would be needed to handle this process.

I will provide a few suggestions that may help from a Chartered Accountant, also a friend of mine:

Employee Residency

Only the work of Ontario taxpayers is eligible to be claimed through the OIDMTC.

Ownership

Ensure that all agreements that you may have with other parties as to who owns the rights to your products are in writing. This is important because you will have to demonstrate that you own the product and the right to sell or license it.

Technical

As part of the OIDMTC claim process, you will need to submit design and technical specification documentation for your product.

Business

A business and marketing plan will be needed so that you can support the claim that you will be selling or licensing the product.

Bottom line

The OIDMTC should not be overlooked as the potential for a 40% return on labour as well as marketing and distribution expenses (capped at $100,000) as this can provide valuable funding for your business.

A little announcement: I have consulted professionals on this matter, however there could be misleading information. For a complete detail, please go to official website.

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