Iowa Administrative Code › Agency 701 - Revenue Department › Title IV - Individual Income Tax › Chapter 304 - Adjustments to Computed Tax and Tax Credits › Rule 701-304.51 - From Farm to Food Donation Tax Credit

Current through Register Vol. 47, No. 3, July 24, 2024
A taxpayer that donates a food commodity that the taxpayer
				  produces may claim a tax credit for Iowa individual income tax. The credit is
				  equal to 15 percent of the value of the commodities donated during the tax year
				  for which the credit is claimed or $5,000, whichever is less. The value of the
				  commodities shall be determined in the same manner as a charitable contribution
				  of food for federal tax purposes under Section 170(e)(3)(C) of the Internal
				  Revenue Code.
(1) To qualify for the
				tax credit, the taxpayer (1) must produce the donated food commodity; (2) must
				transfer title to the donated food commodity to an Iowa food bank or Iowa
				emergency feeding organization recognized by the department; and (3) shall not
				receive remuneration for the transfer. The donated food commodity cannot be
				damaged or out-of-condition and declared to be unfit for human consumption by a
				federal, state, or local health official. A food commodity that meets the
				requirements for donated foods pursuant to the federal Emergency Food
				Assistance Program satisfies this requirement.
(2) To be recognized by the department, a
				food bank or emergency feeding organization must either be a recognized
				affiliate of one of the eight partner food banks with the Iowa Food Bank
				Association or must register with the department. To register with the
				department, the organization must meet the definition of "emergency feeding
				organization," "food bank," or "food pantry" as defined by the department of
				human services in 441-66.1 (234). A food bank or
				emergency feeding organization that seeks recognition by the department shall
				register with the department in the form and manner prescribed by the
				department. The department will maintain a list of recognized organizations on
				the department's website.
(3) Food
				banks and emergency feeding organizations that receive eligible donations shall
				be required to issue receipts in a format prescribed by the department for all
				donations received and must annually submit to the department a receipt log of
				all the receipts issued during the calendar year. The receipt log must be
				submitted in the form of a spreadsheet with column specifications as provided
				by the department. Receipt logs showing the donations for the previous calendar
				year must be delivered electronically or mailed to the department postmarked by
				January 15 of each year. If a receipt for a taxpayer's claim is not provided by
				the organization, the taxpayer's claim will be denied.
(4) To claim the credit for tax years
				beginning before January 1, 2022, a taxpayer shall submit to the department the
				original receipts that were issued by the food bank or emergency feeding
				organization. The receipt must include quantity information completed by the
				food bank or emergency feeding organization, taxpayer information, and a
				donation valuation consistent with Section 170(e)(3)(C) of the Internal Revenue
				Code completed by the taxpayer. Claims must be postmarked on or before January
				15 of the year following the tax year for which the claim is requested. Once
				the department verifies the amount of the tax credit, a letter will be sent to
				the taxpayer providing the amount of the tax credit and a tax credit
				certificate number.
(5) To claim
				the credit for tax years beginning on or after January 1, 2022, a taxpayer
				shall complete the required tax credit form provided by the department and
				shall submit the form with the taxpayer's income tax return for the tax year
				the taxpayer made the qualifying donations. The required tax credit form shall
				be available on the department's website.
(6) Any credit in excess of the tax liability
				for the tax year may be credited to the tax liability for the following five
				years or until used, whichever is earlier. The tax credit shall not be carried
				back to a tax year prior to the year in which the owner redeems the credit. The
				credit is not transferable to any other person.
(7) If the producer is a partnership, limited
				liability company, S corporation, estate or trust electing to have the income
				taxed directly to the individual, an individual may claim the credit. The
				amount claimed by an individual must be based on the individual's pro rata
				share of the individual's earnings of the partnership, limited liability
				company, S corporation, or estate or trust.
This rule is intended to implement Iowa Code chapter 190B,
				  subchapter I, and section
				  422.11R.