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PFB Encourages Using Beginning Farmer Tax Credit
Pennsylvania Ag Connection - 07/14/2020

Property owners in Pennsylvania have a new financial incentive to help beginning farmers access the tools they need to get their start in agriculture.

The Beginning Farmer Tax Credit provides an income tax credit for selling or leasing agricultural assets such as land, livestock, facilities, and equipment to a beginning farmer. The program, administered by the Pennsylvania Department of Community and Economic Development (DCED), is open now.

"I would encourage Pennsylvania farmers and property owners to look into and help spread the word about this new opportunity to help new farmers get established," said Pennsylvania Farm Bureau President Rick Ebert. "We often hear that access to land and equipment are among the greatest barriers faced by beginning farmers, especially those who did not grow up in agriculture. The Beginning Farmer Tax Credit will help beginning farmers who are passionate about their work grow their operations and secure the future of our industry."

Pennsylvania Farm Bureau partnered with state Sen. Elder Vogel, Jr. of Beaver County, chair of the Senate Agriculture and Rural Affairs Committee, to develop and introduce legislation creating the tax credit last year. The measure was signed into law in June 2019.

"The program provides a benefit to landowners who help new farmers get started, because we know that the number one concern facing them is finding affordable farmland," Vogel said. "None of our neighboring states offer a similar tax credit program, so this is a great way to show that Pennsylvania is serious about preserving its agricultural legacy."

Beginning farmers who participate in the program must be certified by DCED by demonstrating that they have the experience or transferable skills needed to work in agriculture, have not received income from farming for longer than 10 years, and plan to farm in Pennsylvania, providing the majority of the labor and management for their operation.

Property owners can claim a credit equal to 5 percent of the sale price or fair market value (whichever is lower) of an asset sold to a beginning farmer, up to a maximum of $32,000. For rental agreements, the credit is equal of 10 percent of gross rental income for the first, second and third years of the rental agreement, up to a maximum of $7,000 per year. The program is capped at $5 million for the 2020 tax year and $6 million for 2021 tax year.

More information, including guidance from DCED and required forms are available at www.pfb.com/BeginningFarmerTaxCredit.

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