Sponsors
The bill incentivizes donations to food charities through a new federal tax credit—likely increasing support for food banks and reducing donor costs—while limiting flexibility and immediate benefit for some donors (nonrefundable credit, changed business treatment) and adding documentation burdens.
Taxpayers who donate cash or wholesome food to qualified food banks and soup kitchens can reduce their federal tax liability by claiming a credit equal to those donations.
Food banks, soup kitchens, and similar 501(c)(3) organizations are likely to receive more donations because donors get a tax credit for contributions used to carry out exempt purposes.
Taxpayers who incur vehicle costs delivering donated food can deduct transportation using the standard mileage rate, offsetting volunteer delivery expenses.
Taxpayers who elect the credit cannot also claim itemized deductions for amounts claimed as the credit, reducing tax filing flexibility and potentially increasing taxable income for some donors.
Donations made through a trade or business are reclassified under general business credit rules, which may impose different limits and reduce the immediate tax benefit for businesses making charitable contributions.
The credit is nonrefundable, so taxpayers with little or no tax liability may not receive immediate benefit and must rely on a limited five-year carryforward to use the credit.
Based on analysis of 2 sections of legislative text.
Creates a nonrefundable tax credit equal to cash or wholesome food donations (including limited transport costs) to qualifying food charities.
Creates a new nonrefundable federal tax credit that lets taxpayers receive a credit equal to cash or "apparently wholesome" food donations made to qualifying food charities (food banks, soup kitchens, and similar 501(c)(3) organizations). The credit can also include transportation costs for delivering donated food up to the IRS standard mileage rate, cannot be claimed together with a deduction for the same donation, and generally treats business donations under the business-credit rules. The credit applies to taxable years beginning after December 31, 2025, and unused credit amounts may be carried forward for up to five years.
Introduced October 21, 2025 by Shri Thanedar · Last progress October 21, 2025