Research Tax Credit

Tax Credit Open to Saskatchewan Growers
Canola growers in Alberta, Saskatchewan and Manitoba who pay a check-off to their provincial organizations qualify for a tax credit.

The rate for Saskatchewan growers under the Scientific Research and Experimental Development (SRED) program for 2007 has been set at 13.9%.

SCDC recommends that growers wait to make their requests until they can determine eligible tax credits from other commodity check-offs. Individual growers have 17.5 months and Canadian controlled private corporations have 18 months after their fiscal year end to request the SRED adjustment.

The following is an example of what a Saskatchewan canola grower could claim. If a grower contributed $200 to the check-off in 2006 and 13.5% of that check-off went to eligible research projects, $27.00 is eligible to earn the Investment Tax Credit.

For individual growers:
$27.00 x 20% = $5.40 (40% refundable)

For Canadian controlled private corporations:
$27.00 x 35% = $9.45 (100% refundable)

The tax credit may be used:
i) to offset federal taxes owing in the current year; or
ii) as a refund (if no taxes are owing, a portion may be refunded to individuals
or the whole credit may be refunded to a corporation); or
iii) to carry forward up to 10 years to offset federal taxes; or
iv) to carry back up to three years to reduce federal taxes paid in those years.

The amount of tax credit used or refunded must be reported as income in the subsequent year.

Also available to corporate producers is a 15% SRED provincial tax credit for projects funded in Saskatchewan.

For more information regarding the SRED tax credit, consult an accountant or visit the Canada Revenue Agency website at: www.cra-arc.gc.ca/sred