Iowa Finance Authority

Custom Farming Tax Credit Program

The Iowa Legislature created the Custom Hire Tax Credit Program in 2013 as an incentive for hiring beginning farmers. The program offers a tax credit to anyone hiring a beginning farmer to do agricultural contract work for the production of crops or livestock in Iowa.

Beginning Farmer Qualifications:

  • Net Worth: No more than $672,171
  • Age: At least eighteen years old
  • Residence: A resident of Iowa
  • Management: Must be owner/operator
  • Training and Experience: Must have sufficient education, training and experience for the anticipated farm operations
  • Access to Capital: Must have access to the following as needed: Adequate working capital, farm machinery, livestock and agricultural land 
  • The beginning farmer can not be the parent, child, step-child, spouse or sibling of the farm operator


  • $50,000 maximum credit
  • 7% tax credit on amount actually paid
  • Contract terms are set by those contracting the custom labor
  • Contract must be less than 12 months
  • Payment for custom labor must be verified
  • Additional credit of 1% for the first year if beginning farmer is a military veteran


  • Application Fee: $200
  • Closing Fee: None


  • Obtain a copy of the Custom Farming Tax Credit Program Application, which includes:
    • Application Instructions
    • Application Checklist
    • Four-page Application
    • Independent Third-Party Verification Form
    • Financial Statement
    • Eligible and Ineligible Projects
Notice Notice
  • All Custom Farming Tax Credit applications must be submitted by November 1 to be considered for that tax year.
  • Maximum net worth is $672,171 as of January 1, 2016
Notice Contact

Steve Ferguson | Program Planner

Tammy Nebola | Program Planner