Scientific Research and Experimental Development (SR&ED) Tax Credit
2012 Investment Tax Credit
Producers who contribute pulse check-off or levy dollars to the Manitoba Pulse Growers Association are able to claim a portion of that levy as an investment tax credit through the Scientific Research and Experimental Development program (SR&ED). Please Note: A farm producer may not claim investment tax credits (ITC’s) on any portion of check-offs or levies that are refunded by the Manitoba Pulse Growers Association.
Canada Customs and Revenue Agency has very specific criteria in order to qualify as an approved research facility. As a result, some of the dollars MPGA allocates to research do not qualify for the Investment Tax Credit. For the 2012 tax year, 29.74% of the dollars MPGA spent on research qualify for the SR&ED Investment Tax Credit. This means that for every levy dollar that was deducted from the sale of pulse crops in Manitoba, 29.74% of that amount is eligible for the Investment Tax Credit.
Individuals can calculate their total check-off contribution by referring to their sales receipts. As an individual, farmers can claim this tax credit at the rate of 20% while corporations are able to claim at the rate of 35% by filing a T2038 (IND) for farm proprietorships or a T2SCH31 for farm corporations.
The investment tax credit earned may be used to offset federal tax owing in the current year; or if you do not owe federal tax in the current year a portion may be refunded to you as an individual or all may be refunded if you are a corporation (CCPC). Other options include carrying the credit forward up to 10 years to offset federal tax or carried back up to three 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/txcrdt/sred-rsde/pblctns/chckff-eng.html.
The reported pulse check–off that was deducted from a producer’s cash ticket and is eligible for the tax credit from 2001-2012 is as follows:
- 2012, 29.74%
- 2011, 22.28%
- 2010, 29.26%
- 2009, 27.8%
- 2008, 16.4%
- 2007, 22.8%
- 2006, 54.0%
- 2005, 56.8%
- 2004, 32.8%
- 2003, 22.28%
- 2002, 29.95%
- 2001, 25.8%