2024 beginning farmer tax credit now open in Minnesota

By Scout Nelson

The Minnesota Department of Agriculture's (MDA) Rural Finance Authority (RFA) is now welcoming applications for the 2024 Beginning Farmer Tax Credit. This annual initiative aims to support the growth of new farmers by offering tax credits to asset owners who rent or sell agricultural properties and equipment to beginning farmers.  

Under this program, asset owners can claim tax credits in various categories, depending on the type of transaction. These include: 

• Cash Rentals: A 10% credit on annual rental income, capped at $7,000, with applications due by July 17, 2024. 
• Share Crop Rentals: A 15% credit on annual rental income, with a maximum of $10,000, also due by July 17, 2024. 
• Farmland Sales: An 8% credit of the sale price (12% for emerging farmers), up to $50,000, due by November 1, 2024. 

All Other Sales (equipment, livestock, etc.): A 5% credit of the sale price, capped at $32,000, with the same November deadline. 

The program's total funding for 2024 stands at $4 million, allocated on a first-come, first-served basis.  

Therefore, early application is highly recommended. Both asset owners and beginning farmers must complete and submit their applications, along with relevant lease and/or sale documents, to secure their position and access the funds.  

Eligible asset owners include individuals, trusts, or qualified pass-through entities in Minnesota. Recent legislative updates now allow immediate family members like parents, grandparents, and siblings to qualify for the tax credit when selling farmland, though this doesn't extend to leases or non-land sales.  

A beginning farmer is defined as a Minnesota resident new to farming or within their first ten years of operation. They should demonstrate potential profitability, possess a net worth below $979,000, and participate in an approved farm business management program. 

Beginning farmers can avail of a nonrefundable Minnesota tax credit to cover their farm business management program tuition, up to $1,500 annually for three years. 

For detailed eligibility criteria, application forms, and further information, interested parties can visit the Beginning Farmer Tax Credit web page or contact Jenny Heck at Jenny.Heck@state.mn.us or 651-201-6316. 

Photo Credit - minnesota-department-of-agriculture