Manitoba R&D & Innovation Tax Credits (2025)

Manitoba has a long-standing commitment to fostering research, development, and innovation in its economy. The province has offered R&D credits since the 1990s, with major enhancements in 2009 to allow part of the credit to be refundable for eligible claimants. Manitoba's policy focuses on supporting local, high-value R&D activities—especially those that create jobs, foster tech commercialization, and expand the province's innovation ecosystem. The Manitoba Research and Development Tax Credit (MRDTC) is a cornerstone of this approach, complemented by the Interactive Digital Media Tax Credit and access to federal incentives such as SR&ED.

Manitoba Research and Development Tax Credit (MRDTC)

  • What it is: A 15% tax credit on eligible SR&ED expenditures incurred in Manitoba by corporations, fully or partially refundable depending on the year incurred. The refundable rate is currently 10%, with the remaining 5% non-refundable.
  • Eligibility: Incorporated businesses carrying on eligible SR&ED activities in Manitoba, including experimental development, applied research, and support work (as defined by CRA for federal SR&ED).
  • Claim Process: File federal SR&ED forms (T661, Schedule 31) and the Manitoba schedule MB479 with your T2. Expenditures must be incurred in Manitoba to qualify for the provincial credit.
  • Stacking: The MRDTC is fully stackable with the federal SR&ED credit—maximize your overall refund by carefully coordinating claims.
  • Refundable vs Non-refundable: Credits earned after 2009 are 10% refundable, 5% non-refundable. Unused non-refundable credits may be carried forward 20 years or back 3 years.
  • Deadlines: File your claim within 18 months after the end of your tax year. Late claims are not accepted.
  • Calculation Example:
    Suppose your corporation incurs $200,000 of eligible Manitoba SR&ED expenses. You can claim a $30,000 federal (15%) and $30,000 Manitoba (15%) credit, of which $20,000 is refundable and $10,000 non-refundable. If your Manitoba tax payable is low, unused credits can be carried forward.

Step-by-Step Claim Instructions

  1. Prepare your federal SR&ED claim (T661, Schedule 31) with detailed technical documentation.
  2. Calculate Manitoba-eligible expenditures (must be incurred in MB).
  3. Complete Manitoba schedule MB479 for the MRDTC, and enter on your T2 return.
  4. File within 18 months of your year end.
  5. Maintain all supporting records for audit purposes.

Manitoba Interactive Digital Media Tax Credit

  • What it is: A refundable tax credit worth up to 40% of eligible labour and marketing expenses for corporations developing interactive digital media products (e.g., video games, e-learning tools, apps) in Manitoba.
  • Eligibility: Corporations with a permanent establishment in Manitoba and qualifying projects. The product must be intended for sale or licensing to external users and meet government criteria for interactivity and content.
  • Claim Process: Apply for a Certificate of Eligibility from Manitoba Finance before claiming. File the digital media schedule with your T2 return after project completion.
  • Deadlines: Pre-approval is required. Application must be made before or during development, not after.
  • Stacking: You may also qualify for federal SR&ED credits on eligible portions of your project.
  • Calculation Example:
    If you spend $300,000 on eligible Manitoba salaries for a video game project, your corporation could claim up to $120,000 as a refundable tax credit.

Step-by-Step Claim Instructions

  1. Review program eligibility and confirm your project qualifies as interactive digital media.
  2. Apply for and receive a Certificate of Eligibility from Manitoba Finance before filing taxes.
  3. After project completion, file the digital media schedule with your T2 and MB479.
  4. Retain detailed payroll, project, and marketing expense records.

Eligible Activities & Expenditures

Eligible expenditures for the MRDTC generally mirror those for federal SR&ED, including salaries and wages, materials, contract expenditures, and overhead. For the Interactive Digital Media Credit, qualifying labour, marketing, and production costs must relate specifically to the eligible digital product. Always consult official guidelines or a tax specialist for complex claims.

Stacking Manitoba & Federal Innovation Credits

Manitoba innovation incentives are fully stackable with federal SR&ED and, in many cases, with other provincial or municipal programs. Some common scenarios:

Tip: Always ensure you do not double-claim the same expense for two different credits (e.g., don't claim 100% of the same salary on both MRDTC and the Interactive Digital Media Credit).

Frequently Asked Manitoba Innovation Credit Questions

How do deadlines work for Manitoba innovation credits?
You must file your MRDTC and Interactive Digital Media Credit claims within 18 months of your corporate year-end. Pre-approval is required for the digital media credit, so apply before or during project development.
Are partnerships eligible for MRDTC?
Yes, but only the corporate partners can claim the credit for their share of eligible expenditures (not individuals or trusts).
Can my non-profit or charity claim Manitoba innovation credits?
No—the MRDTC and Interactive Digital Media Credit are only available to taxable Canadian corporations with a permanent establishment in Manitoba.
What documentation do I need for an audit?
Keep detailed technical project descriptions, timesheets, payroll, contracts, invoices, and proof of Manitoba residency for all expenditures. All claims must be audit-proof.

Links & Official Resources