Senator Sparks Announces Tax Credit for Newer Farmers, Applications Due by November 1
Newer farmers have until November 1, 2018 to apply for a tax credit, says Senator Dan Sparks (DFL-Austin). Full details about eligibility and benefits are available online at www.mda.state.mn.us/bftc.
“The Beginning Farmer Tax Credit can be applied towards the sale or lease of land, equipment, machinery, and livestock for Minnesotans who meet certain requirements,” said Sen. Sparks. “If you would appreciate more information about the application process, please contact me by phone at (651) 296-9248 or by email at firstname.lastname@example.org.”
The state tax credit, available through the Minnesota Department of Agriculture’s Rural Finance Authority on a first-come, first-serve basis, is available for individuals who meet specific criteria. For example, the applicant must be a Minnesota resident with the desire to start farming or began farming within the past ten years, provide projected earnings statements, have a net worth less than $816,800, and enroll in an approved financial management program. The farmer cannot be directly related to the person from which he or she is buying or renting assets. The tax credit for the sale or lease of assets can then be applied to the Minnesota income taxes of the owner of the farm land or agricultural assets.
Three levels of credits are available:
- 5% of the lesser of the sale price or fair market value of the agricultural asset up to a maximum of $32,000;
- 10% of the gross rental income of each of the first, second and third years of a rental agreement, up to a maximum of $7,000 per year;
- 15% of the cash equivalent of the gross rental income in each of the first, second or third year of a share rent agreement, up to a maximum of $10,000 per year.
Interested farmers should note that they can also apply for a separate tax credit to offset the cost of a financial management program up to a maximum of $1,500 per year – for up to three years.