Canada: Tax credit for barley check-off funds is 83%

The 2006 tax credit to producers for barley check-off funds administered by the Western Grains Research Foundation is 83 per cent, Seed Quest published March 22.

In other words, 83 per cent of the check-off dollars paid by barley producers in 2006 is eligible for the Scientific Research and Experimental Development (SR&ED) tax credit.

It should be noted that the check-off on barley in Alberta is not collected by the Western Grains Research Foundation and will be subject to a different tax credit rate.

Only the amount of a producer check-off spent directly on research is eligible - amounts spent on administration and activities such as communication are not. An annual determination is done for each of the commodities where a producer check-off is in place.

If a producer contributed $300 to the Barley Check-off in 2006, the tax credit would be 83 per cent of the $300 or $249.

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). Therefore, in this example, an individual producer would earn a tax credit of $49.80 (20 per cent of $249), while a corporate producer would earn a tax credit of $87.15 (35 per cent of $249).

Producers can visit the WGRF website at www.westerngrains.com for more information about the tax credit. The site will provide a link to the Canadian Revenue Agency website where the appropriate forms can be obtained and options for tax credit use are outlined.

23 March, 2007