Beginning Farmer Tax Credit

Applications open January 1, 2026.

• Funding is limited and will be approved in a first-come, first-served manner.
• Applications will not be available before January 1, but you can get ready by preparing:
  • Signed 2026 lease or fully executed purchase agreement. Purchase agreement can be dated 2025, but sale must close in 2026.
  • Name, address, and contact information for Beginning Farmer (BF) and Asset Owner.
  • Brief education and work history of BF.
  • Simple estimated cash flow for BF for 2026. Prepare additional years if 2026 is net negative.
  • Choose option for BF's farm business management requirement (see below).
  • County, acreage, sale/lease price(s) for the asset.
  • Review eligibility and other program information below.

Tax Credit Overview

The Minnesota Beginning Farmer Tax Credit provides state tax credits to landlords and sellers (asset owners) who rent or sell farmland, equipment, livestock, and other agricultural assets to beginning farmers in the current tax year. Funding is limited. Tax credits are funded in a first-come, first-served manner regardless of the deadlines below. Applicants are highly encouraged to apply early in the year and may apply before sales close if needed.

This is a two-part application. Both beginning farmers and asset owners must submit applications with leases and/or sale documents to hold their place in line for first-come, first-served funding. Applications open annually in early January. More instructions are available in the applications found in the "Apply Here" box on this page.

2025 Zoom Info Session

Program overview, Q&A, and filling out sample applications.

Watch the Recording Here

Tax Credit Details

The tax credit will go to the asset owner (landlord/seller) for leases and sales taking place in the current tax year as follows:

In each given tax year, the asset owner can claim credits in either a rental or a sale with each eligible beginning farmer. We will mail tax credit certificates and filing instructions by the end of January each year.

Am I eligible?

Beginning farmer must

• Be a Minnesota resident who is seeking entry, or has entered into farming within the last 10 years.
• Be renting/buying as an individual (not an LLC or other business entity)
• Provide the majority of labor and management on a farm that is located in Minnesota.
• Have some farming experience and knowledge
• Provide positive projected earnings
• Have a net worth that does not exceed the limit provided under section 41B.03, subdivision 3, paragraph (a), clause (2). This limit is $1,042,000 in 2025.
• Be enrolled in or have completed an approved farm business management program within ten years of their first year of farming (more details below).

Asset owners

• May be an individual, trust, LLC, partnership, S-Corp, or other qualified pass-through entity.
• May claim the tax credit for as many years as the beginning farmer(s) they work with are eligible.
• Cannot be an equipment dealer, livestock dealer, or comparable entity engaged in the business of selling agricultural assets for profit.
• Except for farmland sales, cannot be directly related to the owner of the agricultural asset. This includes parents, grandparents, brothers, sisters, spouses, children, and grandchildren of the beginning farmer and their spouse. 

**Land sales only

• Parents, grandparents, and siblings are eligible for the tax credit if they sell farmland to a direct family member. This does not apply to leases or non-land sales (livestock, vehicles, etc.).
• Credits for farmland sales will be 8% of the sale price for all beginning farmers buyers and 12% if the buyer is also a limited land access farmer.
• Limited Land Access Farmer must meet all of the following:
  1. Does not own any farmland.
  2. Does not rent land from a relative. This includes anyone related to the beginning farmer by blood or marriage (ex. parent, in-law, grandparent, aunt/uncle, great-aunt/uncle, sibling, step-sibling, cousin, second cousin, etc.).
  3. Does not have a lease term greater than three years.

Farm Business Management Requirement

Beginning farmers must be enrolled in or have completed an approved farm business management (FBM) program within ten years of their first year of farming for their asset owners to be eligible for the tax credit.

Reimbursement

Beginning farmers are eligible for a nonrefundable Minnesota tax credit equal to their FBM tuition paid up to a maximum of $1,500. This tax credit is available for up to three years.

Waiver

Beginning farmers may request to waive the FBM requirement if they have a 4-year agricultural degree, reasonable work experience in agricultural finance or have already completed an approved FBM program. If the beginning farmer has already completed 30 credits of FBM courses (or the equivalent hours in another approved FBM program), they do not need to register for additional courses.

What else?

• We can approve leases with one, two, or three year terms. Recertifications for the second and third years of the lease will receive first priority in asset owner tax credit approvals if the beginning farmer submits their application by the deadline. If applying with a multi-year lease, the asset owner must reapply with a lease in the first year of the contract, and the beginning farmer must reapply every year to confirm their eligibility.
• An “agricultural asset” is defined as agricultural land, livestock, facilities, buildings, and machinery used for farming in Minnesota.
• This is a non-refundable tax credit for Minnesota state income taxes, which can be carried forward for up to 15 years for asset owners.