Manitoba interactive digital media tax credit

This refundable tax credit is available to a corporation that incurs qualified labour expenditures, as well as some marketing and distribution expenses, towards the Manitoba‑based development of eligible interactive digital media products for market.

The claim for this credit must be supported by a tax credit certificate issued by Manitoba Economic Development, Investment and Trade (previously Manitoba Economic Development and Training).

The certificate can be issued upon completion of the project or, if the purchaser is not the government or a public body, on a yearly basis. However, the corporation must first receive a certificate of eligibility before the start of the project.

A qualifying corporation must be a taxable Canadian corporation with a permanent establishment in Manitoba.

The credit is refundable. It is now permanent.

The credit is equal to:

• 40% of eligible project costs paid in the tax year to residents of the province, when a corporation pays at least 25% of the salary and wages to employees who are Manitoba residents for the project period
• 35% of eligible labour costs for the year, when a corporation that pays less than 25% of its wages to Manitoba employees, incurs labour expenses of at least $1 million more than government assistance related to those expenses

Companies may claim up to $100,000 in eligible marketing and distribution expenses directly attributable to a project that meets the requirements to claim marketing and distribution costs.

Effective April 7, 2021, the eligible activities for this tax credit include add-on digital media and content that is developed, or provided, mainly for commercial use, and that complements the main product being developed, such as:

• downloadable content
• on-going maintenance and updates
• data management and analysis

Effective April 1, 2023, the eligible expenditures are expanded to allow for more flexible forms of employee compensation and incentives as eligible labour expenditures for this tax credit. This does not include labour expenditures such as bonuses tied to profits or revenues, stock options or signing bonuses, which are still not eligible.

When a government or public authority is the purchaser of an interactive digital media product, the amount paid by the purchaser and the amount of the interactive digital media tax credit cannot be more than 100% of the project's costs.

Repaid or repayable government assistance and repayable or recoupable Canada Media Fund support do not reduce eligible labour costs.

Claiming the credit

On line 614 of Schedule 5, Tax Calculation Supplementary – Corporations, enter the amount of the credit you are claiming.

Supporting documents – File the tax credit certificate with your return no later than the filing-due date for the tax year.

Forms and publications

• Schedule 5, Tax Calculation Supplementary – Corporations

Government partners

• Manitoba Finance – Corporation Tax Credits
• Manitoba (provincial site)