Federal Tax Credit For Farmers On Checkoff

Reading Time: < 1 minute

The federal government annually provides a Scientific Research and Experimental Development (SR&ED) tax credit to producers offering them money back on their checkoff investments.

The tax credit percentage for producers who contributed to the wheat and barley checkoff (administered by the Western Grains Research Foundation) in 2008 are 80 per cent for wheat and 82 per cent for barley.

The checkoff on barley in Alberta is collected by the Alberta Barley Commission and will be subject to a different tax credit rate.

The percentages are calculated by looking at checkoff dollars spent directly on research. This is then determined to be the eligible portion. Each checkoff organization may vary.

The tax credit is earned at a rate of 20 per cent for individuals and 35 per cent for corporate producers that are Canadian controlled private corporations (CCPC).

Doing the math

If a producer contributed $300 to the wheat checkoff in 2008, the eligible amount would be calculated by taking 80 per cent (the wheat percentage) of the $300 = $240.

If the producer files taxes as an individual they would take the $240 and would earn 20 per cent of this amount as a tax credit = $48.

For producers who file as a corporation, they would earn 35 per cent of the $240 as a tax credit = $84.

Producers can visit the WGRF website at www.westerngrains.comunder 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.

About the author



Stories from our other publications