Iowa Finance Authority
Programs

Beginning Farmer Tax Credit

The Agricultural Assets Transfer Tax Credit is commonly referred to as the Beginning Farmer Tax Credit. The program is administered by the Iowa Agricultural Development Division and began with the 2007 tax year. The Beginning Farmer Tax Credit Program was enacted by the Iowa legislature during the 2006 legislative session as an incentive to keep land in production agriculture, by allowing agricultural asset owners to earn tax credit for leasing their land to beginning farmers. The program includes tax credit for the leasing of agricultural land, depreciable machinery or equipment, breeding livestock and buildings.

Application/Approval Procedures

  • Submit a completed and signed copy of the Beginning Farmer Tax Credit (BFTC) Application & Instructions
    • Both asset owner and beginning farmer must fill out the joint application
    • Application instructions are available here.
  • Include a copy of the signed lease agreement
  • Beginning farmer must include a financial statement (dated within 30 days from receipt of application) signed by all applicants and witnessed by a bank officer
  • Application fee for crop share applications will be increased to $200 for the application and $100 for each year of the lease to be collected at time of application
    • Example: If you are submitting an application with a 5-year lease, your fee to enter the program will be: $200 (Application fee) + $500 ($100 x 5 years of servicing) = $700
  • Application fee for cash rent and flex lease applications will remain unchanged at $200 for the application and $50 for each year of the lease to be collected at time of application
    • Example: If you are submitting an application with a 5-year lease, your fee to enter the program will be: $200 (Application fee) + $250 ($50 x 5 years of servicing) = $450
  • Include a copy of the USDA/FSA abbreviated 156 Farm Record form, showing asset owner as owner and beginning farmer as operator
  • Completed applications are due to the IADD by the 1st of each month. Must submit no later than October 1st to be eligible to receive a credit for the current year. 
Notice Notice
Close

The Beginning Farmer Tax Credit certificates for calendar year 2014 were mailed on January 15, 2015.

If the asset owner has not received their certificate by January 31, 2015, please contact Steve Ferguson, 515.725.4928.

  • All tax credit applications must be submitted by October 1 to be considered for that tax year
  • Maximum net worth is $672,171 as of January 1, 2016
  • On all crop share agreements:
    1. Acres will be allocated with 50% to corn and 50% to soybeans, unless other crop acres are specifically identified in the lease
    2. Calculations will be completed with the respective county's historical average T-yield data, and the price will be the previous year's RMA fall price
    3.
    Flex leases may be submitted, but no tax credit will be provided on the flex bonus. The tax credit will be completed at the time the application is received using the USDA T-yields posted on this website. We will not use actual crop or livestock production data.
  • Note: Crop Harvest Reports and Schedule F forms are no longer required
Notice Success
Close
Notice Contact
Close

Steve Ferguson | Program Planner

Tammy Nebola | Program Planner