Landowners and agricultural asset owners could get as much as $50,000 if they do business with emerging farmers. This credit called the 2024 Beginning Farmer Tax Credit or the Agricultural Assets Transfer Tax Credit, is for those who lease their land, equipment and/or buildings to beginning farmers. Currently, the Iowa Finance Authority is accepting applications for the credit.
Beginning Farmer Tax Credit: how much credit to expect
Applications for the 2024 Beginning Farmer Tax Credit are now open in Iowa. It is an annual program that has existed since 2007 and is run by the Iowa Finance Authority. In 2007, the program’s budget was $6 million, while in 2024, it had a budget of $12 million.
The program’s objective is to give new farmers access to land and equipment they wouldn’t usually have access to if they were doing it all on their own. Another objective of the program is to encourage more people to get into the agricultural industry.
Eligible applicants can get between 5% and 15% tax credit. Qualifying asset owners can get a credit of 5% of what they paid in cash rent and 15% of crop share leases, but the limit is $50,000 per person.
If the total credit is more than a taxpayer’s total state tax liability, the balance can be rolled over to the next year. Although the program doesn’t directly benefit the beginner farmer, it does help them indirectly, including helping them avoid the expense of major purchases.
Who will get it and how to apply
To qualify for the 2024 Beginning Farmer Tax Credit, applicants need to meet the following requirements:
- They must be an Iowa resident at least 18 years of age.
- Applicants must have a net worth of up to $833,000. There are no requirements for off-farm income.
- Applicants must have sufficient education, training or experience to manage farm operations efficiently.
- They must also have access to sufficient working capital, equipment and other items that are needed for farm operations.
The Iowa Finance Authority is currently accepting applications for the 2024 Beginning Farmer Tax Credit. Although the last date to apply is Aug. 1, 2024, the state has cautioned that the funds may run out before then. The credits are on a first-come, first-served basis.
To apply for the program, applicants need to download and mail the completed form with all relevant documents to the IADD, 1963 Bell Avenue, Des Moines, IA 50315. The application form is available on the Iowa Finance Authority website.
Applicants with incomplete forms will be notified and they will have 30 days (from the notification date) to correct and submit missing documents. The application will be withdrawn if not corrected within 30 days.
Although the payouts go to the owner of the assets, filings need to be done jointly by the owner and the farmer.
