Tax Credit For Sask Pulse Check-Off

SASKATOON - Mar 10/08 - SNS -- Farmers who contribute pulse check-off dollars to the Saskatchewan Pulse Growers are eligible to earn a federal investment tax credit through the Scientific Research and Experimental Development (SR&ED) program. The tax credit is based on check-off funds spent on research and development that meets specific criteria as set out by Canada Revenue Agency.

For the 2007 tax year, 40% of the Saskatchewan pulse check-off qualifies for the SR&ED tax credit.

Producers can calculate their total check-off contribution by referring to their pulse sales receipts, which show the check-off allocation. Of this total, 40% is eligible to earn an investment tax credit. This resulting check-off amount is eligible to earn an investment tax credit at a rate of 20% for individuals and 35% for corporate producers that are Canadian controlled private corporations. The 40% is comprised of research performed in the following provinces: Saskatchewan 37%, Ontario 2% and Quebec 1%.

To claim the federal tax credit on their tax returns, producers must file a T2038 (IND) for farm proprietorships or a T2SCH31 for farm corporations.

The investment tax credit earned may be used as follows: * To offset federal tax owing in the current year; * If no federal taxes are owing, a portion may be refunded to you in that year if you are an individual, or all of the credit may be refunded if you are a corporation (CCPC); * To be carried forward up to 10 years to offset federal tax; * To be carried back up to 3 years to reduce federal tax paid in those years.

All check-off investment tax credit applied against taxes payable, or refunded, must be reported by the producer as income in the subsequent year.

For more information on the process of claiming the tax credit, please consult your accountant or visit the Canada Revenue Agency website at http://www.cra-arc.gc.ca/taxcredit/sred/publications/check-e.html.