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Beginning Farmer Tax Credit Program

Soybean field

The Beginning Farmer Tax Credit program was created through House Bill 95, signed into law by Governor Mike DeWine on April 21, 2022. It offers two income tax credits beginning in tax year 2023 in two categories:

  • Beginning farmers who attend a financial management program 
  • Individuals/businesses that sell or rent farmland, livestock, buildings, or equipment to beginning farmers

Beginning Farmer Criteria

Beginning Jan 1, 2023, qualifying beginning farmers may apply for the Beginning Farmer Tax Credit.

Who qualifies as a beginning farmer? 

A beginning farmer is someone who:

  • Is a resident of Ohio.
  • Is seeking entry to or has entered farming within the last 10 years.
  • Farms or intends to farm on land in Ohio.
  • Is not a partner, member, shareholder, or trustee of the assets the individual is seeking to purchase or rent.
  • Has a total net worth of less than $800,000, including spouse and dependent assets, as adjusted for inflation each year.
  • Provides the majority of daily physical labor and management of the farm.
  • Has adequate farming experience or knowledge in the type of farming for which they are seeking assistance.
  • Submits projected earnings statements and demonstrates profit potential.
  • Demonstrates farming will be a significant source of income for the individual.
  • Participates in a financial management program approved by ODA.

What are the benefits of the tax credit?

The beginning farmer receives a tax credit for the cost of the financial management program.

How do I apply?

  • A Beginning Farmer should submit a complete application along with required attachments to ODA at BeginningFarmer@agri.ohio.gov
  • After submitting the application, the applicant will receive an acknowledgement email from the Beginning Farmer Tax Credit Program. 
  • ODA will then review the application and attachments.
  • Once approved, a tax credit certificate will be issued to the beginning farmer. If denied, an email will be sent to the applicant stating the denial. 

Asset Owner Criteria

Individuals/businesses that sell or rent farmland, livestock, buildings, or equipment to qualifying beginning farmers may apply. 

Who qualifies as an agricultural asset owner?

  • An individual or business that sells or rents “agricultural assets” to a qualifying beginning farmer may also apply to the Director of Agriculture for a tax credit. 
    • Agricultural assets include land, livestock, facilities, buildings, and machinery used in farming.
      • In order for land to qualify as an agricultural asset, it must total at least 10 acres or produce an average annual income of at least $2,500 from farming. 
      • Equipment dealers and similar businesses that sell agricultural assets for profit are not eligible for the credit. 

What are the benefits of the tax credit?

The credit equals 3.99% of one of the following: 

  • In the case of a sale, the sale price. The credit must be claimed in the year of the sale.
  • In the case of a rental, the gross rental income that the individual or business received during the first three years of the rental agreement. To qualify for the credit, an asset must be rented at prevailing community rates. In the case of a rental, the credit is claimed over the first three years of the rental or share-rent agreement.
  • In the case of a rental through a share-rent agreement, the gross rental income received during the first three years of the share-rent agreement. A share-rent agreement is an arrangement by which, in exchange for the rented assets, the beginning farmer provides the owner of the assets with a specified portion of the farm products produced from the assets. In the case of a rental, the credit is claimed over the first three years of the rental or share-rent agreement.

How do I apply?

  • An asset owner should submit a complete application along with required attachments to ODA at BeginningFarmer@agri.ohio.gov
  • After submitting the application, the applicant will receive an acknowledgement email from the Beginning Farmer Tax Credit Program. 
  • ODA will then review the application and attachments.
  • Once approved, a tax credit certificate will be issued to the asset owner. If denied, an email will be sent to the asset owner stating the denial.  

Applications

Beginning Farmer Tax Credit Application

Beginning Farmer Tax Credit Asset Transfer Form

Eligible Courses

Approved programs include: