Program also offers increased support for emerging farmers



department of agriculture


*For Immediate Release*




*Media Contact:?
*Logan Schumacher, MDA Communications

651-201-6193

[email protected] <[email protected]>




June 22, 2023

Previous Announcements [ [link removed] ]





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Beginning Farmer Tax Credit Expands to Further Incentivize Land Transfer

Program also offers increased support for emerging farmers

*St. Paul, MN*: Owners of agricultural assets that lease or sell to beginning farmers in Minnesota may be eligible for the Beginning Farmer Tax Credit [ [link removed] ], which is open for applications through the Minnesota Department of Agriculture?s (MDA) Rural Finance Authority (RFA).

Those who have previously applied should take note of the new application deadlines for rentals (July 17) and sales (November 1). Additionally, recent legislative changes have resulted in several updates to the program to further incentivize farmland sales:


* An increase in the tax credit amount to 8% of the sale price for buyers and 12% if the buyer is an emerging farmer (previously 5% for all).
* A new maximum tax credit of $50,000 (previously $32,000).
* Direct family members such as parents, grandparents, and siblings are now eligible for farmland sales.

Qualifying applicants can include individuals, trusts, or qualified pass-through entities renting or selling land, livestock, facilities, buildings, or machinery used for farming in Minnesota to a beginning farmer.

A beginning farmer is defined as a Minnesota resident with the desire to start farming or who began farming in Minnesota within the past 10 years. They must provide positive projected earnings statements, have a net worth less than $979,000, and enroll in, or have completed, an approved farm business management (FBM) program [ [link removed] ].

Asset owners can claim credits in?one?of the below categories in a given tax year for?each*?*beginning farmer they lease/sell to:

?



*Tax Credit Amount*



*Maximum Tax Credit*



*Application Due Date*



*Cash Rentals*



10% of annual rental income



$7,000



July 17, 2023



*Share Crop Rentals*



15% of annual rental income



$10,000



July 17, 2023



*Farmland Sales*



8% of sale price (12% if the buyer is an emerging farmer)



$50,000



November 1, 2023



*All other sales (equipment, livestock, etc.)*



5% of sale price



$32,000



November 1, 2023



To be eligible for the tax credit, both the asset owners and beginning farmers must submit applications.

Beginning farmers are also eligible for a nonrefundable Minnesota tax credit equal to the amount paid for FBM tuition, up to a maximum of $1,500. This tax credit is available for up to three years.

Full eligibility requirements and application materials can be found on the Beginning Farmer Tax Credit webpage [ [link removed] ]. Questions may be directed to Jenny Heck at [email protected] or 651-201-6316.

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