Applications Open Jan. 1 for MDA 2026 Beginning Farmer Tax Credit

Eligible parties are encouraged to apply early for funding

St. Paul, MN: The Minnesota Department of Agriculture’s (MDA) Rural Finance Authority (RFA) will start accepting applications for the 2026 Beginning Farmer Tax Credit on January 1. This is an annual program available to landlords and sellers (asset owners) who rent or sell farmland, equipment, livestock, and other agricultural assets to beginning farmers.

There is $4 million available for the program. The credits are funded in a first-come, first-served manner, so applicants are highly encouraged to apply early before the stated deadlines. Funds ran out in late January for the 2025 tax credit.

Both asset owners and beginning farmers must submit applications with lease and/or sale documents to be eligible for funding and to hold their place in line. They may apply before sales close with a valid purchase agreement, if needed.

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

Qualifying asset owners 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. Parents, grandparents, and siblings are eligible for the tax credit if they sell farmland to a direct family member. However, this does not apply to leases or non-land sales (e.g., livestock, equipment).

A beginning farmer is defined as a Minnesota resident with the desire to start farming or who began farming within the past 10 years. They must provide positive projected earnings statements, have a net worth less than $1,042,000, and enroll in or have completed an approved Farm Business Management (FBM) program.

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.

New for 2026: “Limited Land Access Farmer” replaces “Emerging Farmer” in the program. To qualify for the 12% rate for a sale, the Limited Land Access Farmer must meet all the following:

• Does not own any farmland.
• Does not rent land from a relative. This includes anyone related to the Limited Land Access Farmer by blood or marriage (ex. parent, in-law, grandparent, aunt/uncle, great-aunt/uncle, sibling, stepsibling, cousin, second cousin, etc.).
• Does not have a lease term greater than three years.

The MDA will be hosting an informational webinar on Monday, December 22 from 4-5 p.m. to answer questions about the Beginning Farmer Tax Credit.

Informational webinar details

Monday, December 22 4-5 p.m.
Register in advance at https://us02web.zoom.us/meeting/register/pK4SMpwZTq-hpf5WNpG4Vw
After registering, you will receive a confirmation email containing information about joining the meeting.

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

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