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Home > Grants, Loans & Financing > Beginning Farmer Tax Credit > Beginning Farmer Tax Credit FAQs

Beginning Farmer Tax Credit (BFTC) Frequently Asked Questions

Is the BFTC good for more than one year? Certification of a beginning farmer or an owner of agricultural assets is valid for the year of certification and the two following years for rental and share rent contracts. After the 3rd year, you will have to reapply.

What is considered a “family member”? A person not directly related to you or your spouse. This includes grandparents, parents, spouses, brothers, sisters, children, and grandchildren. Transactions from aunts/uncles are acceptable.

Are step-parents/step-children considered family members? Yes, if a legal adoption has taken place.

Can an approved credit be carried forward? The beginning farmer management tax credit can be carried forward up to 3 years. The credit for owners of agricultural assets can be carried forward up to 15 years.

What is an approved financial management program? Any course that has a farm financial management aspect to it that has been approved by the RFA. A partially inclusive list is posted on the webpage. If a course is not on there, the RFA will need to be contacted by the educational institution or educator for course approval.

What if I have already completed a financial management program or have a 4 year Agriculture degree? Statute does not account for any previous education as a waiver to this requirement.

What is a “farm product”? "Farm product" means plants and animals useful to humans and includes, but is not limited to, forage and sod crops, oilseeds, grain and feed crops, dairy and dairy products, poultry and poultry products, livestock, fruits, and vegetables.

What is “farming”? "Farming" means the active use, management, and operation of real and personal property for the production of a farm product.

Can an agricultural asset be sold or rented to a partnership or LLC? No. Any agricultural asset under the BFTC must be sold or rented to an individual.

Can I sign a purchase agreement to buy land before 2018? Yes. As long as the purchase transaction takes place in 2018.

I own land with multiple people and rent it to a beginning farmer, do we all have to apply? Yes, the tax credit will be tied to a tax ID number. Each tax ID filer must complete the BFTC to get the credit.

Agricultural asset owner A, B, and C rent land to the child of Ag asset owner A. Can Ag asset owner B and C apply for the BFTC? No. Since the renter is the child of Ag asset owner A, this parcel would not be eligible.

How is the maximum net worth of $800,000 determined? This is determined by the balance sheet completed by the beginning farmer.

If the $5 million allowed for 2018 is not fully allocated, can it be carried forward to 2019? Yes. Any unused dollars will be allocated to the next taxable year.