2016 Tax Credit – 26% of MPSG check-off
Farmers who contribute pulse check-off dollars to the Manitoba Pulse & Soybean Growers (MPSG) are eligible to claim a federal tax credit through the Scientific Research and Experimental Development (SR&ED) program. The tax credit is based on the amount of check-off funds spent on research and development that meet specific criteria set out by the Canada Revenue Agency (CRA).
For the 2016 tax year, 26% of the Manitoba pulse check-off qualifies for the SR&ED tax credit.
Farmers can calculate their total check-off contribution by referring to their pulse and soybean sales receipts. Of this total, 26% is eligible to earn an investment tax credit. As an individual, farmers can claim this tax credit up to a maximum of 15% while corporations are able to claim at the rate of 35%.
To claim the federal tax credit on your tax returns, you must file 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.
Source : ManitobaPulse