Pulse Check Off Tax Credit

SASKATOON - Mar 17/10 - SNS -- Producers 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, reports the association.

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 2009 tax year, 27% 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, 27% is eligible to earn an investment tax credit. This resulting check-off amount is eligible to earn an investment tax credit up to a maximum of 20% for individuals and up to a maximum of 35% for corporate producers that are Canadian controlled private corporations.

The 27% is comprised of research performed in the following provinces: Saskatchewan 25%, Manitoba 1%, 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 20 years to offset federal tax;

* To be carried back up to three 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.

The percentage off check-off/levy that is eligible for SR&ED tax credit for other commodities is: Saskatchewan Flax Development Commission: 7.17%, Western Grain Research Foundation Barley: 76%, Western Grain Research Foundation Wheat: 83%, and Saskatchewan Canola Development Commission: 18%.

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/txcrdt/sred-rsde/menu-eng.html.