By Scout Nelson
The Minnesota Beginning Farmer Tax Credit offers state tax incentives to landlords and sellers who lease or sell agricultural assets to beginning farmers. This program is designed to support new farmers and encourage the transfer of agricultural assets to them. Funding is provided on a first-come, first-served basis, so early application is highly recommended.
The program includes both cash and sharecrop rental agreements, as well as sales of agricultural assets like farmland, livestock, and equipment. For cash rental agreements, asset owners can receive up to 10% of the annual rental income, with a maximum tax credit of $7,000. Sharecrop rentals offer up to 15% of the rental income, with a maximum of $10,000. For asset sales, tax credits can be as high as 8-12% of the sale price, depending on the buyer’s status as a beginning or emerging farmer, with a maximum credit of $50,000.
Eligibility for beginning farmers includes being a Minnesota resident who has been farming for 10 years or less, is enrolled in a farm business management program, and meets the financial criteria. Their net worth must not exceed $1,013,000 as of 2024. The asset owners, who can be individuals or entities like trusts or partnerships, can claim credits for as long as they work with eligible beginning farmers. However, asset owners cannot be directly related to the beginning farmer.
The program also offers tuition reimbursement for beginning farmers who complete an approved farm business management program, up to $1,500 for a maximum of three years. Beginning farmers may request a waiver of this requirement if they have sufficient agricultural experience or an agricultural degree.
Applications open annually in January, and both asset owners and beginning farmers must submit their applications together to secure their place in line for tax credits. For more information, visit the program's application page.
Photo Credit: minnesota-department-of-agriculture
Categories: Minnesota, Business