A Beginning Farmer is defined as:<ul><li>A Minnesota resident who is seeking entry, or has entered into farming within the last 10 years</li><li>A farmer who will provide the majority of the labor and management of the farm that is located in Minnesota</li><li>Has adequate experience and knowledge of the type of farming for which they seek assistance from the Rural Finance Authority</li><li>Can provide positive projected earnings statements</li><li>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)</li><li>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 $903,000.</li></ul>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.

Federal funding programs are under review as of 1/27/25. We'll make updates as new info is released.

Cover photo for Minnesota Beginning Farmer Tax Credit

Minnesota Beginning Farmer Tax Credit (MN-BFTC)

Minnesota Department of Agriculture

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.

Discount

Minnesota

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 $903,000.

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.

Application Instructions

Complete the application below according to the instructions.

Submit by email (preferred): mda.bftc@state.mn.us

or by mail to:

Rural Finance Authority

Minnesota Department of Agriculture

625 Robert St. N.

St. Paul, MN 55155

Forms

Beginning Farmer Tax Credit Application (2023)

Beginning Farmer Tax Credit Asset Owner Application (2023)