Government of Ontario, Ministry of Finance – Community Food Program Donation Tax Credit for Farmers (2022)

ByMaurice

Description:

The Community Food Program Donation Tax Credit for Farmers is a non-refundable income tax credit for farmers who donate agricultural products to eligible community food programs in Ontario, including food banks. The credit is worth 25% of the fair market value of the agricultural products donated and can be claimed for donations made on or after January 1, 2014.

Comments on Funding:

For individuals or sole proprietorships, the amount of the tax credit depends on how much the applicant gives and is calculated as 25% of the value of the qualifying donations. Applicants 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% of the corporation’s qualifying donations for the tax years ending after December 31, 2013, that the corporation claimed on Schedule 2, Charitable Donations and Gifts.

Eligibility:

An eligible person means:

  • an individual (or his or her spouse or common-law partner), or sole proprietorship, who carries on the business of farming and resides in Ontario on December 31 of the tax year, or
  • a corporation that carries on the business of farming in Ontario.

A trust is not entitled to claim this tax credit.

A qualifying donation is:

  •  a donation of one or more agricultural products produced in Ontario;
  • made to an eligible community food program in Ontario on or after January 1, 2014 by an eligible person.

An eligible community food program is a person or entity:

  • that is engaged in the distribution of food to the public without charge in Ontario, including as a food bank; and
  • that is registered as a charity under the Income Tax Act (Canada);
  • whose primary purpose for distributing food to the public without charge in Ontario is to provide relief to the poor, 
  • that oversees or operates one or more student nutrition programs that provide meals or snacks to students enrolled in an elementary or secondary school or an alternative learning program.

Other Things to Note:

  1. Individuals or a sole proprietors must fill a completed Form ON428, Ontario Tax, with their personal income tax and benefit return (T1 return). Those who file their return electronically, need to keep all their receipts and documents for six years. If they file a paper return, attach all official receipts for their qualifying donations to their paper return.
  2. Corporations claim the credit by filing a completed Schedule 2, Charitable Donations and Gifts, with their corporation income tax return (T2 return). Receipts do not have to be attached to the corporate income tax return. Applicants must keep all official receipts in case they are asked for them later during an audit.

About the author

Maurice

Maurice (Moe) Muise learned the ins-and-outs of government while an employee of the Government of Canada in Ottawa for 10 years. His current focus is helping small businesses in Ontario to identify and maximize government grants to grow their business. Click here to learn more about Moe’s background and how he can help your business.

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