Minnesota Beginning Farmer Tax Credit (MN-BFTC)

The Minnesota Beginning Farmer Tax Credit provides tax credits for the rent or sale of farm land or a variety of farm assets to beginning farmers. This includes incentives for the sale of farm land.

A Beginning Farmer is defined as:

• A Minnesota resident who is seeking entry, or has entered into farming within the last 10 years

• A farmer who will provide the majority of the labor and management of the farm that is located in Minnesota

• Has adequate experience and knowledge of the type of farming for which they seek assistance from the Rural Finance Authority

• Can provide positive projected earnings statements

• Is not directly related to the owner of the agricultural asset (This includes parents, grandparents, brothers, sisters, spouses, children, and grandchildren. Legal adoption shall be considered in full effect)

• Has a net worth that does not exceed the limit provided under section 41B.03, subdivision 3, paragraph (a), clause (2). Currently this limit is $836,000.

The beginning farmer may need to participate in an approved financial management program. Costs of financial management programs up to a maximum of $1,500 per year (for up to 3 years) may also be eligible for a tax credit. The financial management credit need not be tied to any agricultural asset sale or rental.

The credit to the agricultural asset owner is as follows:

• 5% of the lesser of the sale price or fair market value of the agricultural asset up to a maximum of $32,000;

• 10% of the gross rental income in each of the 1st, 2nd, and 3rd years of the rental agreement, up to a maximum of $7,000 per year, or

• 15% of the cash equivalent of the gross rental income in each of the 1st, 2nd, and 3rd years of a share rent agreement, up to a maximum of $10,000 per year. The agricultural asset owner can claim credits in one of the above categories in a given tax year up to the maximums stated. 

• Beginning Farmer Tax Credit Fact Sheet

• Beginning Farmer Tax Credit Asset Owner Application (2021)

• Beginning Farmer Tax Credit Application (2021)

• Crop Share Calculator