Manitoba interactive digital media tax credit
This permanent 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.
Effective April 1, 2023, the eligible expenditures were expanded to allow for more flexible forms of employee compensation and incentives as eligible labour expenditures for this tax credit. However, these do not include labour expenditures such as bonuses tied to profits or revenues, stock options or signing bonuses, which are still not eligible.
To claim this credit, a corporation must first apply to Manitoba Economic Development, Investment, Trade, and Natural Resources for a certificate of eligibility. This certificate gives the corporation a preliminary indication as to whether the project will be eligible for the credit and an estimate of the final tax credit amount. The corporation must receive a certificate of eligibility before it can incur eligible expenses.
The corporation must then apply for a tax credit certificate, which is used to claim a tax credit with the CRA. The corporation can apply for this certificate at:
- the end of every corporate tax year
- the end of the project
However, if the corporation applies at the end of the project, only the expenses incurred in the current tax year, or the two years immediately preceding the current year, are eligible for a tax credit.
Expenses for eligible projects are to be claimed in the tax year in which they were incurred. Some qualified corporations, in certain circumstances, will be exempt from having to apply for a certificate of eligibility (pre-approval) before project work starts.
An eligible corporation must be a taxable Canadian corporation with a permanent establishment in Manitoba.
The credit is equal to:
- 40% of eligible expenditures, if the corporation pays at least 25% of its total salary and wages to employees who are residents of Manitoba during the year the corporation incurred the eligible project expenses
- 35% of eligible expenditures, if the corporation pays less than 25% of its total salary and wages to Manitoba residents and it incurs at least $1 million in qualifying Manitoba labour expenses during the tax year related to its eligible projects, and provided that these expenses are not already supported by another form of government assistance
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.
The eligible activities for this tax credit also 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
When a government or public authority purchases 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
The requirement that a corporation claim the credit on or before its filing due date for the tax year was eliminated.
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.
Forms and publications
Government partners
- Manitoba Finance – Corporation Tax Credits
- Manitoba (provincial site)