Scientific name: Amphimallon majale Razoumowsky (Syn.
Yes, asset owners are eligible for the tax credit if they are selling their farm with a 1031 Exchange.
Are 1031 Exchanges eligible with this program?
Yes, asset owners are eligible for the tax credit if they are selling their farm with a 1031 Exchange.
No. According to the state law for this program, an eligible asset owner is, “an individual, trust, or pass-through entity that is the owner in fee of agricultural land or has legal title to any other agricultural land.” A C-Corporation is not a “pass-through” entity as described in the law.
Is a C-Corporation an eligible asset owner?
No. According to the state law for this program, an eligible asset owner is, “an individual, trust, or pass-through entity that is the owner in fee of agricultural land or has legal title to any other agricultural land.” A C-Corporation is not a “pass-through” entity as described in the law.
Asset Owners - No. An asset owner can apply for the maximum tax credits for either a rental or a sale for each eligible beginning farmer each year. There is no lifetime limit, and they can continue to apply for the program as long as the beginning farmer they work with is eligible.
Beginning Farmers - Yes. Beginning farmers are only eligible for the FBM tuition reimbursement tax credit for three years. However, beginning farmers can continue to apply for the program with their asset owners for all 10 years that they are considered a beginning farmer (they just won't get an FBM tax credit for years 4-10).
Is there a lifetime maximum/limit for tax credits?
Asset Owners - No. An asset owner can apply for the maximum tax credits for either a rental or a sale for each eligible beginning farmer each year. There is no lifetime limit, and they can continue to apply for the program as long as the beginning farmer they work with is eligible.
Beginning Farmers - Yes. Beginning farmers are only eligible for the FBM tuition reimbursement tax credit for three years. However, beginning farmers can continue to apply for the program with their asset owners for all 10 years that they are considered a beginning farmer (they just won't get an FBM tax credit for years 4-10).
Introduce cover crops into the cropping system. Cover crops are grasses, legumes, or forbs planted for seasonal vegetative cover, established on an annual basis, between successive cash crops or companion-planted into a cash crop. Cover crops often get planted in fields following a short season crop or other times when a field would otherwise have little or no vegetative cover. Cover crops can be established between growing seasons to protect the soil from erosion and nutrient loss.
A primary purpose of cover crops is to capture left-over nutrients, like nitrate-nitrogen in the soil. Other purposes may include forage production, erosion reduction, suppression of weeds or pests, improvement of soil moisture use efficiency, or overall soil health improvement.
The amount of nitrate leaching reduction from cover crops varies depending on many factors, mainly weather and biomass accumulation of the cover crop in the fall. Despite their variability, research has shown that cover crops provide a nitrate reduction compared to no cover crops. Studies in Minnesota and Iowa have shown reductions in nitrate loads in drainage water between 11% and 76% with rye cover crop.
Requirements to qualify for Cover Crop Initiative funding:
- Work with MDA field staff, local Soil and Water Conservation District (SWCD), Natural resources Conservation Services (NRCS) technician, agronomist, or other natural resource professional to plan, develop, and design a cover crop program based on adoption of species that have a very good or excellent ability to scavenge nitrogen. Inclusion of cover crops into a cropping system involves unique management strategies. Please refer to MDA’s Minnesota Cover Crop Guide, the Midwest Cover Crops Council, or NRCS MN Agronomy Tech Note 33 for information on cover crop species, seeding date, seeding rate, method of seeding, etc.
- Work with a local SWCD and enroll in their cover crop program, if possible.
- Funding through this initiative may be available for producers operating in a Level 2 DWSMA who choose to go above and beyond a local county/SWCD, state, or federal cover crop program. For example: additional or different acres may be funded through this initiative than those acres enrolled in a publicly funded local SWCD, Federal Farm Bill, Minnesota Ag Water Quality Certification Program (MAWQCP), or other state cost share program.
- Producers cannot participate in another publicly funded cover crop cost share program on a county, state, or federal level on the same acres enrolled in this initiative. For example: producers participating in a Federal Farm Bill Cost-share program, MAWQCP cover crop program, or other state of Minnesota cover crop program, or local county/SWCD cover crop program are ineligible to enroll the same acres from the publicly funded program into this initiative.
Producer Compensation
Producers who enroll in the Cover Crop Initiative may be eligible for compensation based on meeting the components in the technical resources mentioned above. Producers may be eligible for a payment of $40/acre up to 125 acres for a maximum of $5,000. Payment to producer will be made upon successful establishment of cover crop.
Cover Crop
Introduce cover crops into the cropping system. Cover crops are grasses, legumes, or forbs planted for seasonal vegetative cover, established on an annual basis, between successive cash crops or companion-planted into a cash crop. Cover crops often get planted in fields following a short season crop or other times when a field would otherwise have little or no vegetative cover. Cover crops can be established between growing seasons to protect the soil from erosion and nutrient loss.
A primary purpose of cover crops is to capture left-over nutrients, like nitrate-nitrogen in the soil. Other purposes may include forage production, erosion reduction, suppression of weeds or pests, improvement of soil moisture use efficiency, or overall soil health improvement.
The amount of nitrate leaching reduction from cover crops varies depending on many factors, mainly weather and biomass accumulation of the cover crop in the fall. Despite their variability, research has shown that cover crops provide a nitrate reduction compared to no cover crops. Studies in Minnesota and Iowa have shown reductions in nitrate loads in drainage water between 11% and 76% with rye cover crop.
Requirements to qualify for Cover Crop Initiative funding:
- Work with MDA field staff, local Soil and Water Conservation District (SWCD), Natural resources Conservation Services (NRCS) technician, agronomist, or other natural resource professional to plan, develop, and design a cover crop program based on adoption of species that have a very good or excellent ability to scavenge nitrogen. Inclusion of cover crops into a cropping system involves unique management strategies. Please refer to MDA’s Minnesota Cover Crop Guide, the Midwest Cover Crops Council, or NRCS MN Agronomy Tech Note 33 for information on cover crop species, seeding date, seeding rate, method of seeding, etc.
- Work with a local SWCD and enroll in their cover crop program, if possible.
- Funding through this initiative may be available for producers operating in a Level 2 DWSMA who choose to go above and beyond a local county/SWCD, state, or federal cover crop program. For example: additional or different acres may be funded through this initiative than those acres enrolled in a publicly funded local SWCD, Federal Farm Bill, Minnesota Ag Water Quality Certification Program (MAWQCP), or other state cost share program.
- Producers cannot participate in another publicly funded cover crop cost share program on a county, state, or federal level on the same acres enrolled in this initiative. For example: producers participating in a Federal Farm Bill Cost-share program, MAWQCP cover crop program, or other state of Minnesota cover crop program, or local county/SWCD cover crop program are ineligible to enroll the same acres from the publicly funded program into this initiative.
Producer Compensation
Producers who enroll in the Cover Crop Initiative may be eligible for compensation based on meeting the components in the technical resources mentioned above. Producers may be eligible for a payment of $40/acre up to 125 acres for a maximum of $5,000. Payment to producer will be made upon successful establishment of cover crop.
