Beginning Farmer Tax Credit is now available

Years in the making, and thanks in large part to the ongoing efforts of Ohio Farm Bureau, the Beginning Farmer Tax Credit is now available to those who’ve recently entered the field, as well as those who help beginning farmers.

“The idea for House Bill 95 all started because younger Ohio Farm Bureau members who were working their way into agriculture and more experienced members looking to step away from the industry were facing many obstacles when it came to working on a transition plan,” said Adam Sharp, Ohio Farm Bureau executive vice president. “Through their recommendations, our organization worked through the policy development process to successfully add incentives for new and beginning farmers to the list of important issues Farm Bureau advocates for every day. Those grassroots efforts have now come to fruition with the passage of this legislation.”

The tax credit was created when HB 95 was signed into law by Gov. Mike DeWine April 21, 2022. Primary sponsors for the bill were Rep. Susan Manchester (R-Waynesfield) and Rep. Mary Lightbody (D-Westerville).

“Agriculture and food is Ohio’s number one industry,” said Ohio Department of Agriculture Interim Director Tracy Intihar. “The Beginning Farmer Tax Credit will help keep costs down for new producers and encourage others to help them. This incentive ensures that our state will continue to provide for local communities, the country, and even the world.”

To qualify, a beginning farmer is someone who:

Is a resident of Ohio.
Is seeking entry to or has entered farming within the last 10 years.
Farms or intends to farm on land in Ohio.
Is not a partner, member, shareholder, or trustee of the assets the individual is seeking to purchase or rent.
Has a total net worth of less than $800,000, including spouse and dependent assets, as adjusted for inflation each year.
Provides majority of daily physical labor and management of the farm.
Has adequate farming experience or knowledge in the type of farming for which seeking assistance.
Submits projected earnings statements and demonstrates profit potential.
Demonstrates farming will be a significant source of income for the individual.
Participates in a financial management program approved by ODA.

Beginning farmers will need to complete a financial management program to qualify.

Along with beginning farmers, asset owners, or people or businesses that sell or rent farmland, livestock, buildings, or equipment to beginning farmers may apply as well. In order for land to qualify as an asset, it must either total at least 10 acres or produce an average annual income of at least $2,500 for farming.

The Beginning Farmer Tax Credit equals 3.99% of one of the following:

In the case of a sale, the sale price. The credit must be claimed in the year of the sale.
In the case of a rental, the gross rental income that the individual or business received during the first three years of the rental agreement. To qualify for the credit, an asset must be rented at prevailing community rates. In the case of a rental, the credit is claimed over the first three years of the rental or share-rent agreement.
In the case of a rental through a share-rent agreement, the gross rental income received during the first three years of the share-rent agreement. (A share-rent agreement is an arrangement by which, in exchange for the rented assets, the beginning farmer provides the owner of the assets with a specified portion of the farm products produced from the assets.) In the case of a rental, the credit is claimed over the first three years of the rental or share-rent agreement.

For more information, including applications, visit the Ohio Department of Agriculture.

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The Beginning Farmer Tax Credit, which was created by the grassroots process of Ohio Farm Bureau, is available to those who’ve recently entered the field, as well as those who help beginning farmers.