Prairie crop growers who are preparing their returns for the 2014 tax year and didn’t ask for refunds on their crop checkoffs may be able to see some of those funds come back in tax credits.
Some crop commodity groups’ checkoffs qualify for the federal Scientific Research and Experimental Development (SR+ED) tax credit, which can be claimed on 80 per cent of eligible research-related expenditures.
Thus, investments in eligible research in 2014 through the western wheat and barley checkoff, administered through the Western Grains Research Foundation, will allow growers to claim 74 per cent of both their wheat and barley checkoff dollars, up from 68 per cent on wheat and 71 per cent on barley in 2013.
The SR+ED tax credit can be used to offset federal taxes owing in the current year; received as a tax refund; carried forward up to 10 years to offset federal taxes owing; or carried back three years to reduce federal taxes paid in those years.
The tax credit is worth 20 per cent of the claimed amount for individual farmers and 35 per cent for farm corporations. Using the WGRF example, an individual grower who paid $100 in wheat checkoff would claim $68 and receive a tax credit of $13.60.
Table: Crop groups’ SR+ED tax credits for 2014 (per cent)
|Western Grains Research Foundation (wheat)||68|
|Western Grains Research Foundation (barley)||71|
|Alberta Canola Producers Commission||17.89|
|Alberta Pulse Growers Commission||17.5|
|Alberta Wheat Commission||9|
|Saskatchewan Flax Development Commission….||9.79|
|Saskatchewan Pulse Growers||44**|
* — Also eligible for claim of 15.8 per cent of levy toward Saskatchewan Research and Development Tax Credit for farm corporations.
** — Also eligible for claim of 15 per cent of levy toward Saskatchewan Research and Development Tax Credit for farm corporations.
Commodity groups whose SR+ED tax credit percentages haven’t yet been announced for 2014, or whose checkoffs aren’t yet deemed eligible, include the Saskatchewan Wheat Development Commission, Saskatchewan Mustard Development Commission, Canaryseed Development Commission of Saskatchewan, Manitoba Pulse and Soybean Growers, Manitoba Wheat and Barley Growers Association and Manitoba Corn Growers Association.