GHENT – State Rep. Chris Swedzinski, R-Ghent, reminds beginning farmers Nov. 1 is the deadline to apply for state tax credits the Legislature provided in 2017 to assist in starting operations.
Beginning farmer credits are available to Minnesota residents for the sale or lease of land, equipment, machinery and livestock. Qualified applicants include those looking to start farming or those who began farming within the past 10 years. Applicants must provide projected earnings statements, have a net worth less than $816,800, and enroll in an approved financial management program. Other stipulations apply, such as the farmer cannot be directly related to the person from which he or she is buying or renting assets.
“Agriculture is crucial to our way of life here in greater Minnesota and our future success relies on new generations of farmers,” Swedzinski said. “Unfortunately, start-up costs can be a big barrier for beginning farmers. These tax credits are designed to lessen that burden and help more young farmers reach of their goals.”
Three levels of credits are available to agricultural asset owners:
- 5 percent of the lesser of the sale price or fair market value of the agricultural asset up to a maximum of $32,000;
- 10 percent 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 percent 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.
The Beginning Farmer Tax Credit is available on a first-come, first-served basis.
The MDA also indicates farmers can 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.
-30-