As I have discussed in my three previous posts, the Ontario Interactive Digital Media Tax Credit (OIDMTC) is a refundable tax credit that can be earned by companies operating in any sector. The rates on the credits range from 35% to 40% depending on the product nature. I am not going to go into details of what products or costs specifically qualify in this post as that information were covered in earlier posts. This post will instead provide some guidance and tips to help you claim the OIDMTC in your corporation.
These claims can become complex and often time consuming. If you lack the resources or expertise I do advise getting external assistance to aid in the process. A good external provider will make your life easier by handling the brunt of the work and preparing the appropriate documentation required to claim the OIDMTC. If you have the time and want to attempt a filing on your own, you should take note of the items that are often overlooked in these claims.
The first item would be the supporting information for a digital product. Often when preparing a digital media product, you will spend significant time and money on the supporting information that is included in the product (i.e. work on a whitepaper included in the product/site). This cost is often overlooked by claimants as they feel that it doesn’t affect the technology of the product.
The second item would be the documentation that supports your claim. I know it is difficult to track all of the time spent on multiple projects within a company, but this type of documentation is one of the keys to a successful claim. Higher quality documentation usually results in an increased claim. In addition to this, quality documentation will likely result in a faster review by the Ontario Media Development Corporation (OMDC) – the individuals who review your application to determine eligibility. And ultimately, the sooner the review is complete, the sooner you will get your money.
The third item would be the marketing costs. OIDMTC claims permit up to $100,000 of marketing costs per project. These costs can be incurred in the 24 months preceding and 12 months following product completion. Often claimants will forget to include the marketing expenditures they have incurred up to the date of filing as well as a reasonable estimate of the future costs they expect to incur. I always consider these costs to be the gravy on your claim as they are essentially compensating you for your selling costs.
If you want additional information or support for an OIDMTC claim I invite you to contact myself at [email protected] You can also contact the OMDC by clicking on the link or calling the general line at 416-314-6858.
Until next time, keep your head up and don’t let tax or cash flow problems get you down. After all, the professionals at Welch are only a phone call (613-236-9191).
Joshua Smith, CPA, CA
Manager, Business Incentives