Tax credits up slightly on wheat, barley checkoffs

Wheat and barley growers who kept their checkoff dollars in the Western Grains Research Foundation’s checkoff fund during 2012 can expect a slightly larger tax credit for their support.

Prairie growers — other than Alberta barley growers, who pay into a different checkoff fund — will see their 2012 WGRF checkoff money eligible for federal Scientific Research and Experimental Development (SR+ED) tax credits at rates of 85 per cent for wheat and 86 per cent for barley, up from 84 and 83 per cent respectively in the 2011 tax year.

The WGRF calculates the available tax credit based on the portion of the total checkoff money going directly to support eligible research. Farmers who don’t opt out of the WGRF checkoff pay in at rates of 56 cents per tonne for barley and 48 cents per tonne for wheat.

The SR+ED tax credit is earned at a rate of 20 per cent for individuals, unincorporated businesses and large public corporations, and 35 per cent for Canadian-controlled private corporations.

So for example, if an individual Prairie farmer put $300 into the WGRF’s wheat checkoff in 2012 and did not opt out, he or she would get a federal tax credit of $51 ($300 x 0.85 x 0.20). If filing his or her 2012 taxes as a corporation, the same farmer would get a tax credit of $89.25 for his or her WGRF wheat checkoff.

Effective Aug. 1, 2012, wheat and barley checkoff deductions are made on sales of wheat and barley delivered to licensed grain buyers who issue cash purchase tickets. At Canadian Grain Commission-licensed facilities, the amount is noted as "Deduction of levy" on the issued ticket.

The wheat and barley checkoff programs are administered on the federal government’s behalf by the Alberta Barley Commission, which collects its own separate checkoff on Alberta barley sales. For 2012, the SR+ED tax credit rate is 13 per cent for Alberta barley growers who kept their money in the commission’s checkoff, down from 22 per cent in the 2011 tax year.

Also in 2012, Alberta canola growers who keep their checkoff money in the Alberta Canola Producers Commission checkoff fund and don’t request refunds will qualify for the SR+ED tax credit at a rate of 7.02 per cent, down from 14.3 per cent in the 2011 tax year.

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