SR&ED Tax Credit
Growers who contribute pulse levy dollars to Saskatchewan Pulse Growers (SPG) are eligible to earn a federal investment tax credit through the Scientific Research and Experimental Development (SR&ED) program. The tax credit is based on the amount of levy funds spent on research and development (R&D) that meet specific criteria set out by the Canada Revenue Agency (CRA).
For the 2016 tax year, 30% of the Saskatchewan pulse levy qualifies for the federal SR&ED tax credit.
Growers can calculate their total levy contribution by referring to their pulse sales receipts, which show the levy allocation. Of this total, 30% is eligible to earn an investment tax credit. This resulting levy amount is eligible to earn an investment tax credit up to a maximum of 15% for individuals and up to a maximum of 35% for corporations that are considered Canadian controlled private corporations.
The 30% is comprised of research performed in Saskatchewan (26%), Alberta (1%), Manitoba (1%), and Ontario (2%).
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).
Corporations are also eligible for the 10% Saskatchewan R&D tax credit for research performed in Saskatchewan, using Schedule 403 to claim the credit on tax returns.
All levy investment tax credit applied against taxes payable or refunded must be reported by the grower as income in the subsequent year. For more information on the process of claiming tax credits, please consult your accountant. For information on the federal SR&ED investment tax credit, visit the Canada Revenue Agency website.
For more information on the SR&ED tax credit for pulse crops, please contact us.
For more information on the SR&ED tax credit for other Saskatchewan crops, please click on the links below: