Cover photo for Minnesota Beginning Farmer Tax Credit

Minnesota Beginning Farmer Tax Credit (MN-BFTC)

Minnesota Department of Agriculture

About

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.

Eligibility

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.

Terms

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. 

Resources

Similar Programs

Details

Organization

Minnesota Department of Agriculture (MNDA)

Financial Instrument

Discount

Image Credit

Jamie Street

Updated July 30, 2021

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