Thanks to legislation enacted in 2013, Kentucky farmers are eligible to receive a tax credit equal to 10 percent of the value of edible agricultural products donated to food banks. A tax credit not used by a qualified taxpayer in the current taxable year may be carried forward for up to four succeeding years.
Click here to see the food donation tax credit form.
Farmers are to ask the food bank to sign Schedule FD to certify that the charitable organization is exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, certify that it operates a surplus food collection and distribution program as defined in KRS 141.392(1)(c), and certify that the information included in the schedule is true, correct and complete.
KRS 141.392(3)(b) provides that a donor shall determine the value of the donated edible agriculture products as follows:
(i) if there was a previous sale of the edible agriculture products to a buyer, the donor shall retain a copy of an invoice or other statement identifying the price received by the donor for the edible agriculture products of comparable grade and quality; or
(ii) If there is no previous sale to a buyer, the donor shall on the date of the donation, determine the value of the donated edible agriculture products based on the fair market value as determined by average weekly regional produce auction prices or United States Department of Agriculture prices for meat, fish and dairy products.
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