The federal government annually provides a Scientific Research and Experimental Development (SR&ED) tax credit to producers offering them money back on their check-off investments.
The tax credit percentage for producers who contributed to the Wheat and Barley Check-off (administered by the Western Grains Research Foundation) in 2008 are 80% for wheat and 82% for barley.
It should be noted that the check-off on barley in Alberta is collected by the Alberta Barley Commission and will be subject to a different tax credit rate.
The percentages above are calculated by looking at the amount of the check-off dollars spent directly on research, this is then determined to be the eligible portion. Each check-off organization may vary, as they will have their own eligible percentage.
The tax credit is earned at a rate of 20% for individuals and 35% for corporate producers that are Canadian controlled private corporations (CCPC).
Doing the Math – A Wheat Example
If a producer contributed $300 to the Wheat Check-off in 2008, the eligible amount would be calculated by taking 80% (the wheat percentage) of the $300 = $240.
If the producer files taxes as an individual they would take the $240 and would earn 20% of this amount as a tax credit = $48.00.
For producers who file as a corporation, they would earn 35% of the $240 as a tax credit = $84.00
The SR&ED tax credit is a great way for farmers to get back part of their check-off investment from government,” says Lanette Kuchenski, WGRF executive director. “The WGRF and other commodity groups worked hard to have government recognize the significant investment from farmers into R&D and make this tax credit available. Hopefully farmers use this opportunity and talk to their accountants about the advantages it holds for them.”
Producers can visit the WGRF website at www.westerngrains.com under the Current Info tab for links to the Canadian Revenue Agency website where the appropriate forms can be obtained and options for tax credit use are outlined.
