The Farm Service Agency (FSA) announced changes being implemented that previously were outlined in the Working Families Tax Cuts Act, including an adjusted gross income (AGI) exemption for producers using certain programs. Since the legislation broadened the definition of farming income to be more reflective of modern agricultural business practices, diversified producers now will not be penalized under USDA’s requirements for average AGI.
Beginning with program year 2026, producers are exempt from the $900,000 AGI cap for conservation and disaster programs if at least 75% of their AGI is from farming, ranching or silviculture, which now includes agritourism, direct-to-consumer sales and certain equipment sales. Certification is required on a CCC-943 form and must include verification by a certified public accountant, tax attorney or authorized enrollment agent. Qualified pass-through entities, including limited liability companies and S-Corporations, are not required to certify compliance with the average AGI limitation at the entity level.
For more information, contact your local FSA office.