Farmers can get state tax credit for donating food

July 26, 2019

by Leigh Adcock, communications specialist

Many Iowa farmers generously donate products to their area food pantries each year. Some farms, like Mustard Seed Community Farm near Ames, raise much of their food primarily for that purpose.

Box of vegetables, tax credit.

Whatever amount of food they donate, farmers can qualify for a state tax credit through the Farm to Food Donation Tax Credit program. Farmers who donate self-produced food commodities to food banks and pantries can claim credit on their state taxes up to 15% of the value of the commodities donated or $5,000 per year, whichever is less.

The Iowa legislature passed the tax credit program in 2013, and it took effect the next year. Since then, 39 pantries or food banks have received food donations from farmers who applied for a tax credit.

Here’s the breakdown of donations from tax year 2017 (most recent available) by commodity and value:

2017 food donation data.

Maren and Tom Beard of Luna Valley Farm near Decorah learned about the tax credit last fall. Their accountant brought it to their attention after they donated a grass-fed steer to their area pantry.

Maren said, “It’s a pretty neat program and a great incentive to share abundance from our farms with our communities.”

More details

Pantries and food banks must register with the state to participate. Then they can verify food donations from farmers with an authorized receipt provided by the Iowa Department of Revenue.

According to the IDR website, farmers can donate “apparently wholesome food,” meaning it meets all local, state and federal quality and labeling standards. The law allows donation of food that isn’t “readily marketable,” but it must still be fit for human consumption.

A few more details:

  • A donor sets the value of the food donation based on current market price.
  • The tax credit applies to individual or corporate income taxes.
  • Farmers need to keep their donation receipts and a spreadsheet tracking their donations for the year, to submit with their tax credit claim.

Farmers or pantry managers with questions can contact John Good at IDR at this email or 515-725-2324.

Take a look at the IDR report on the Farm to Food Donation Tax Credit program for tax year 2017 (most recent available).

Related resource

Community Donation Gardening Toolkit