ST. PAUL, MN – Beginning farmers in Minnesota can still receive a tax credit for the sale or lease of land, equipment, machinery, and animals under the Minnesota Department of Agriculture's Rural Finance Authority or RFA.
The tax credit for the sale or lease of assets can subsequently be credited to the owner of the agricultural land or other assets' Minnesota income taxes.
There are three credit levels available:
• 5% of the agricultural asset's sale price or fair market value, up to a maximum of $32,000
• 10% of gross rental income generated during 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 gross rental income in the first, second, and third years of a share rent agreement, up to a maximum of $10,000 per year.
• The Beginning Farmer Tax Credit is limited in quantity and is distributed on a first-come, first-served basis.
To be eligible, applicants must be Minnesota residents who wish to begin farming or who have begun farming in Minnesota within the last ten years, provide positive projected earnings statements, have a net worth of less than $862,000, and enroll in or complete an approved financial management program.
The farmer cannot be connected to the person from whom he or she is purchasing or renting assets by blood or marriage (e.g., parent, child, grandparent, grandchild, or sibling). The farmer is responsible for the majority of farm labor and management.
Farmers interested in applying should keep in mind that they can also apply for a separate tax credit to offset the cost of a financial management program up to $1,500 per year - for a maximum of three years.
Please note that applications must be postmarked no later than October 1, 2021.
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