2019 Tax Credit – 25% of MCGA check-off
Farmers who contribute corn check-off dollars to the Manitoba Corn Growers Association (MCGA) 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 invested in research and development that meet specific criteria set out by the Canada Revenue Agency (CRA).
For the 2019 tax year, 25% of the Manitoba corn check-off qualifies for the SR&ED tax credit.
Farmers can calculate their total check-off contribution by referring to their corn sales receipts. Of this total, 25% 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.
For more information on the process of claiming the tax credit, please consult your accountant or visit the Canada Revenue Agency website.
Please Note: A farmer may not claim investment tax credits (ITC’s) on any portion of check-off that has been refunded by the Manitoba Corn Growers Association.
For more information on the Scientific Research and Experimental Development Tax Incentive Program, click here.