Ontario farmers who donate products or livestock to community food programs such as food banks and school nutrition programs can now expect an income tax credit in return.
The province on Monday unveiled its Food Donation Tax Credit for Farmers, which it bills as the only one of its kind so far in Canada.
Farmer donors can claim a non-refundable income tax credit valued at 25 per cent of the fair market value of the agricultural products they donate to eligible community food programs. The proclaimed legislation allows farmers to claim credits for donations dating back to Jan. 1 this year.
“Ontario’s farmers have a long tradition of donating their agricultural products to charitable causes, and we believe this credit will both honour that tradition and help motivate others to donate,” Ontario Federation of Agriculture general manager Neil Currie said in the province’s release.
The Ontario Association of Food Banks hailed the announcement as “historic” for farmers and food banks. “Everyone should have the opportunity to enjoy local food, and we applaud the Ontario government for introducing this tax credit,” association executive director Bill Laidlaw said in a separate release.
“Many food bank clients do not receive the recommended daily servings of fruits, vegetables and protein, which cause additional strains on one’s health and well-being,” he said. “A balanced diet with local, fresh and nutritious foods will help improve the health of food bank clients as well as the health of communities across Ontario.”
The association and the OFA have previously pressed for the province to adopt such a tax credit, noting some U.S. states such as Colorado, Oregon and North Carolina have such credits available. [Related story]
Donations of “one or more agricultural products produced in Ontario” will qualify for the new tax credit, if made by an “eligible person” such as a farmer, his or her spouse or common-law partner, a sole proprietorship or a farming corporation. A trust may not claim the tax credit.
Eligible products include meat or meat by products, eggs or dairy products, fish, fruits, vegetables, grains, pulses, herbs, honey, maple syrup, mushrooms, nuts, or anything else grown, raised or harvested on a farm, and that may be “legally sold, distributed or offered for sale at a place other than the premises of its producer as food.”
Eligible products can also include any of those items if processed “no more than to the extent necessary for the product to be legally sold at a place other than the premises of the producer.”
The definition also includes livestock “suited for and intended to be processed as food.”
Eligible community food programs include any people, entities and/or food banks engaged in distributing food to the public without charge in Ontario and registered as a charity under the federal Income Tax Act.
An eligible program must also be one in which the main purpose for distributing food “is to provide relief to the poor,” or one which oversees or operates one or more student nutrition programs providing meals or snacks to students in an elementary or secondary school or alternative learning program.
For individuals or sole proprietorships, the amount of the tax credit is calculated as 25 per cent of the value of the qualifying donations, claimed on Ontario Form ON428. A donor must also claim the qualifying donations under the charitable donations tax credit in the same year.
For corporations, the tax credit is equal to 25 per cent of the corporation’s qualifying donations for tax years ending after December 31, 2013, that the corporation claimed on Schedule 2 (Charitable Donations and Gifts).
Receipts don’t have to be attached to a corporate income tax return, but all official receipts should be kept in case they’re needed during an audit. — AGCanada.com Network