Tax Incentives to Donate
When the Emergency Economic Stabilization Act of 2008 was signed into law it extended the Pension Protection Act of 2006 which provides tax deductions for food donations to all business taxpayers from Jan. 1, 2008 to Dec. 31, 2009.
This legislation enables all business taxpayers, including farmers, franchisees, ranchers and other small business owners, to continue taking an enhanced tax deduction that is equal to the cost of their food product plus ½ of the fair market value appreciation, not to exceed twice the cost.
In the past, only C corporations could take this tax deduction. During the Katrina crisis, the federal government extended the deductions to other food donors, but the taxes were short term.
This action represents a major victory for The Mission in Citrus and the corporations, farms, small businesses, and restaurants that donate food. At a time when we are seeing more families in crisis due to layoffs, high food and fuel prices, we are grateful for the strong incentives to donate.
Highlights of the Food Donation Provision in H.R.1424:
- The deduction for C corporations stays the same under the new provision.
- The provision is extended to ALL business taxpayers engaged in a trade or business; ALL business taxpayers are eligible to claim the enhanced deduction for contributions of food inventory.
- For qualified farmers and ranchers, the total value of the food donated can exceed 10% of the taxpayer’s net income for the 2008 calendar year.
- For most S corporations, except farmers and ranchers, the total value of food donated may not exceed 10% of the taxpayer’s net income for the calendar year.
Note: taxpayers using the cash method of accounting are not eligible for the tax deduction.
Contributions are tax deductible to the extent provided by law. Please discuss the tax implications of your donation with your tax advisor. Your donated items will not be sold, transferred or bartered for money, other products or services. As a donor you are also released from any liability resulting from the condition of donated products pursuant to the Washington “Food Bank Good Samaritan Act” and the federal “Bill Emerson Good Samaritan Food Donation Act”.
You Can Make a Difference
The Mission in Citrus needs your support to continue to build and expand our unique hunger-relief programs.The Mission in Citrus will pick up any food available. (352)794-3825