Federal and State Tax Policies

The Food Bank actively monitors and acts to protect existing tax deductions and credit for donations of food and funds to charitable food assistance organizations and to encourage the continuation of the exclusion of food from the state sales tax.

Tax Policy Priorities

  • Protect the structure/funding for the PA Neighborhood Assistance Program (NAP) Charitable Food Program tax credits
  • Protect and strengthen federal charitable giving tax incentives
  • Protect and strengthen federal food donation tax incentives
  • Protect and strengthen tax credits for working families like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC)
  • Reject extension of the state sales tax to include food

 

NAP

The Neighborhood Assistance Program (NAP) is a tax credit program which encourages businesses to invest in projects that improve the quality of life of Pennsylvanians. This initiative has enabled the private sector to donate millions of dollars to community organizations while substantially reducing their tax burden.  

The Charitable Food Program (CFP) component of NAP (one of four) is focused on improving food security in Pennsylvania. CFP assists charitable programs that provide food to low-income populations in distressed areas. A tax credit of up to 55% can be awarded.   

Child Tax Credit (CTC)

The Child Tax Credit (CTC) program allows low- and moderate-income families to reduce their tax liability for each qualifying child under the age of 17. 

The 2021 American Rescue Plan increased the value of the CTC to $3,600 for children under age 6, and $3,000 for those age 6-17. It also made the tax credit fully refundable, ensuring families with lower incomes receive a greater increase in the amount received and making the credit available to many extremely low-income families for the first time. These provisions are set to expire on December 31, 2021. 

CTC Policy Priorities
  • Make permanent the temporary increases in the CTC. This would provide families with children and working adults with additional critical economic resources, with the expanded benefits being specifically targeted to very low-income households.

Reject the extension of the state sales tax to include food

Pennsylvania does not apply its sales tax to grocery purchases. Proposals to reform state taxes have frequently included provisions that would cut or eliminate property taxes and instead increase sales taxes and/or broaden the goods and services subject to the to levy. Since application of a 6 percent tax on food (7 percent in Allegheny County) would increase food costs to the people we serve, the Food Bank opposes such proposals. 

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers earning relatively low wages. The EITC is provided to individuals and families once a year, in a lump-sum payment after individuals and families file their federal income tax returns. The amount of the credit a taxpayer receives is based on the prior year’s earned income and family composition. 
The 2021 American Rescue Plan expanded this tax credit, with the additional benefits targeted to younger, low-income taxpayers without dependents. This expansion is set to expire on December 31, 2021. 
EITC Policy Priorities
    • Make permanent the temporary expansion of the EITC that is making critical financial resources available to low-income, working adults.