Food Donation Tax Credit for Farmers

In addition to helping the community, donating food to local food banks can now earn Ontario farmers a tax credit.  Ontario recently became the first and only province in Canada to offer a 25% non-refundable tax credit to farmers who donate agricultural product to food banks.

Officially launched last year, this credit is available to both local Ontario farmers and farming corporations.  Receipts may be issued at any Ontario based food bank or food program that is a registered charity under the Federal Income Tax Act.  Donated products that qualify as “agricultural product” include: meat or meat by-products, eggs, dairy products, fish, fruits, vegetables, grains, pulses, herbs, honey, maple syrup, mushrooms, nuts, and anything else that is grown, raised, or harvested from a farm.

Step-by-Step Guide for Farmers

Step 1: As an Ontario farmer, make a difference in your community by donating agricultural product to your local food bank.

Step 2: The food bank will then issue a Gift in Kind receipt after determining the Fair Market Value of your donation.  This may take a while, as food banks must verify the Fair Market Value of donations valuing over $1000.

Step 3: Using the Gift of Kind receipt, farmers must mark the donation as a sale out of inventory on their income taxes, after which they will claim the Food Bank Donation Tax Credit for Farmers on their provincial income taxes.

Any questions about the Food Donation Tax Credit for Farmers can be answered by contacting the Ontario Ministry of Agriculture, Food, and Rural Affairs (OMAFRA), or by visiting www.Ontario.ca/fooddonation.  The Ontario Association of Food Banks (OAFB) is also of help.

For more details on the newly-introduced legislation allowing for the Food Donation Tax Credit for Farmers please refer to the Ontario Association of Food Banks website:  http://www.oafb.ca/bill-36—tax-credit-for-farmers.