41-167: IA 178 Farm to Food Donation Tax Credit 41-167 (2024)

Who files this form

Taxpayers claiming Iowa’s Farm to Food Donation Tax Credit must use IA 178 to report eligible food commodity donations and calculate the credit for tax year 2024.

Donor-producers use the form to calculate their credit. Taxpayers receiving an allocated credit from a partnership, LLC, S corporation, estate, or trust report that credit on Part II Total, line 2, and include IA 178 with their tax return.

What you'll need

Have the following information ready:

• Authorized receipts from authorized food organizations for donations made during tax year 2024. These provide the food organization codes and receipt numbers.
• Your name and SSN or FEIN, plus the pass-through entity’s legal name and FEIN, if applicable, and the tax period ending date.
• Each donation’s date, commodity type, quantity, measurement unit, and price per unit on the donation date.
• Any Farm to Food Donation Tax Credit amount received from a pass-through entity.

Use additional sheets if you need more space.

How to file

1. Complete all applicable taxpayer information fields.
2. Enter each donation separately in Part II. If one donation included multiple commodities, list each commodity on a separate line.
3. Multiply quantity by price per unit to calculate the donation value. Multiply that value by 15% to calculate the credit for each line.
4. Add Column I and enter the total or $5,000, whichever is less, on Part II Total, line 1. Enter credits received from pass-through entities on line 2.
5. Include IA 178 and IA 148 with your IA 1040, IA 1041, or IA 1120. Include IA 178 with your IA 1065 or IA 1120S.

For credits claimed on IA 148, report each claim separately in Part I using tax credit code 26. For credits received from another pass-through entity, also provide the required entity information in Part IV.

Partnerships and S corporations report credits on their respective Schedule B and members’ Schedule K-1 using code 26. Estates and trusts allocating credits to beneficiaries report each beneficiary’s share on IA 1041 Schedule K-1 using code 26.

The supplied text does not specify a mailing address or an e-file procedure.

Common mistakes

• Leaving out required information. The instructions warn that failure to provide information needed to verify the credit will result in denial of the claim.
• Combining donations or commodities. Report each donation separately, and use a separate line for each commodity within a donation.
• Using the wrong units. Report eggs by the number of eggs, not dozens or gross. Use pounds for meat and fresh produce, gallons for liquid dairy products, and pounds for solid dairy products.
• Making special allocations. Pass-through entities must allocate the credit according to each member’s share of the entity’s total earnings. Special allocations are not permitted.
• Leaving IA 178 out of the return. The form must be included with your tax return.

Questions people ask

Do I need a tax credit certificate before claiming the credit?

No. Donor-producers do not need to receive a tax credit certificate from the Iowa Department of Revenue before claiming this credit.

How is the credit calculated?

Multiply the donated quantity by the price per unit on the donation date, then multiply that value by 15%. Add the credits in Column I and enter the total or $5,000, whichever is less, on Part II Total, line 1.

Where do I find the food organization code?

The six-digit code appears on the authorized receipt provided by the food organization when you made the donation.

How do I report a fractional quantity?

Round to the nearest whole unit. The instructions give these examples: 142 pounds, 7 ounces rounds to 142 pounds, while 142 pounds, 8 ounces rounds to 143 pounds.

Where do I report a credit received from a pass-through entity?

Enter the amount on Part II Total, line 2, of IA 178 and include the form with your tax return.

Official sources

• https://revenue.iowa.gov/media/4128/download?inline