Planning ahead for tax deductions and credits

In the spirit of the holidays and closing out 2022, we want to thank you as a supporter of Manna Food Center’s Community Food Rescue (CFR) program. This program, now celebrating its 8^th year, would not be possible without you, the CFR network of 475 food donor businesses, non-profit food assistance organizations, and volunteer food runners. If you are a participating food business, including farmers, or a volunteer food runner, we also want to give you some tips on tax deductions and credits that you may be eligible to take. As a CFR network member, you can also make gathering the required tax reporting information easier by using your ChowMatch account.

Volunteer Food Runners

Thank you for your vital role in literally connecting people with food. In 2022, CFR volunteers made 835 food runs and delivered 147,559 lbs. of food (through Dec. 11) to non-profit food assistance providers throughout Montgomery County.

CFR volunteer food runners can see how many miles they’ve driven in their ChowMatch account and claim this deduction on their taxes.

You are eligible to take a tax deduction for food runs. You can keep a log of your miles (getting the miles from your  ChowMatch account) and take the standard deduction based on the IRS charitable standard mileage rate of .14 cents per mile (yes, this is much less than the allowable IRS deduction for paid employees). Or you can deduct the actual cost of gas for your volunteer service. You are not allowed to deduct ordinary auto expenses such as insurance, maintenance, tires, or depreciation as if you were using your vehicle for business purposes. Also, you do not need any verification of volunteer service from the organization. Please check with your tax advisor for any clarification. For more information about reporting volunteer miles on your tax return, read this report . 

Did you know that you can quickly look up how many miles you drove delivering food for CFR?  Log in to your ChowMatch account, click on the down arrow next to Volunteer. Click on My Past Runs & Events. Click on the year or date range. Click submit. Look for the miles on the far right of the screen.

Food Donor Businesses (non-farmers)

Thank you for donating much needed and appreciated food in 2022. A total of 95 businesses donated 452,443 lbs. of food that was distributed to 62 organizations in Montgomery County this year. In 1976, Congress enacted Internal Revenue Code, Section 170e3, to encourage businesses to donate fit and wholesome food inventory to qualified 501(c)3 non-profit organizations serving people who are experiencing poverty and hunger.

Food donor businesses like Mastiha Bakery can take an enhanced tax deduction for donating food through CFR.

These businesses can take an enhanced deduction that covers the cost of the food, plus half of the expected profit had the food been sold. The national non-profit organization ReFED has created a federal enhanced tax deduction policy guide.  You can also click HERE for a simple-to-follow guide with examples of how to apply for the enhanced tax deduction.

Food Donor Businesses (farmers)

In 2022, 16 local farmers donated 13,410 lbs. of fresh produce, meat, and eggs through Manna’s Community Food Rescue program. CFR volunteers picked up this unsold food, which was redistributed to our network of 108 non-profit food providers throughout Montgomery County.

The farmers who donated this food can take advantage of the Farm Food Donation Program, extended in 2022 (SB 539), which allows  a Maryland tax credit of up to $5,000 per year for donating fresh produce to charitable organizations. We see this program as a win, win, win. Not only does this healthy, fresh, delicious produce, dairy and meat go to people who need and appreciate it, but farmers are compensated, and good food does not go to waste.

Farmers, like Butler’s Orchard, who donate food to CFR can claim a tax credit.

Manna farm partner, Butler’s Orchard has been a proud supporter of the Food Donation Tax Credit since its inception. Farm and Finance Manager, Ben Butler, says of the credit, “Its extension is critical to maintaining the financial benefit that farms need to offset some of their costs when donating produce. This tax credit literally can be the difference between crops rotting in the fields and ending up on the plates of those who need it.”

To claim a farmer tax credit, complete this form, and make sure to itemize each product, amounts donated, and date of donation. Note that the TCCA form mentioned is what Manna submits along with your form. Print, sign, and scan the completed form and send it to Cheryl Kollin, CFR’s Program Director. She will verify your donation and then submit the form to the Maryland Department of Agriculture, which calculates the value of your donated food and will send you a letter that you can submit with your taxes. This is currently a slow process so please submit your information to Cheryl Kollin for the current tax year as soon as possible. Note that the farmer tax credit is only available for donated food– not for food that is purchased, such as under the County Farm to Food Bank program.

For now, enjoy the holidays and tuck this information away for tax time.