The U.S. Department of Agriculture is bolstering its outreach and education programs for farmers and ranchers. Ten million dollars has been set aside for agriculture-oriented taxpayer education, and $4.5 million in outreach for the Conservation Reserve Program’s Transition Incentives Program.
CRP TIP programs will help provide access to land for beginning and socially disadvantaged farmers and ranchers, aiming to advance equity across USDA programs.
“Running a farm operation is tough, and we are working to help meet gaps where farmers need assistance,” said Deputy Under Secretary for Farm Production and Conservation Gloria Montaño Greene. “First, filing taxes for an agricultural operation can be challenging. Many agricultural producers may not have the funds to hire accountants or tax professionals to assist, especially for new and historically underserved producers. This new initiative offers support to producers in navigating tax season. Second, we want to make sure producers are aware of our many program options, and Conservation Reserve Program Transition Incentives Program provides a unique opportunity for producers with expiring CRP land to help bring new farmers into the fold.”
The Farm Service Agency’s $10 million investment funds the new Taxpayer Education and Asset Protection Initiative. The FSA has partnered with the University of Arkansas and the National Farm Income Tax Extension Committee. This partnership establishes hubs for taxpayer education while developing and delivering tax education resources to farmers, ranchers, agricultural educators, and tax professionals through partnerships with stakeholders and minority-serving institutions across the country.
A primary consideration for the funding is farmer education regarding USDA program funds. Funds received for conservation contracts, disaster assistance payments, and pandemic relief is taxable income and should be coupled with business planning associated with their program payments.
The subsequent phases of this work will include a suite of online resources for producers, continuing education opportunities for tax attorneys and CPAs, cooperative agreement funding, and training opportunities for stakeholder organizations.
“Many rural areas lack legal and certified accounting services, and agricultural producers need additional knowledge and/or resources to integrate tax planning into their financial planning,” said Ronald L. Rainey, Assistant Vice President of the University of Arkansas System Division of Agriculture. “This partnership will help the University of Arkansas and USDA work together to overcome inequalities in tax services to serve agriculture communities.”
These tax education partnerships focus on addressing the immediate needs of producers by delivering agricultural tax and asset protection training and information to farmers, and developing infrastructure to support rural taxpayer education and tax preparation for limited resource, beginning, and historically underserved farmers and ranchers for the long term.
Tax Estimator Tool
Additionally, the USDA is updating and expanding online tax resources for producers, including the new Tax Estimator Tool, an interactive spreadsheet that producers can download to estimate tax liability. It is for informational and educational purposes and should not be considered tax or legal advice. Producers may need to work with a tax professional to determine the correct information in the Tax Estimator Tool.
Available Funding for CRP TIP Outreach
TIP provides financial incentives to CRP participants with expiring contracts if they sell or rent the land to a beginning producer, veteran farmer or rancher, or a producer from a socially disadvantaged group.
The FSA is making available up to $4.5 million in funding and expects to award 15 to 20 partner and stakeholder organizations to conduct outreach and provide technical assistance to promote awareness and understanding of CRP TIP among agricultural communities, in particular those who are military veterans, new to farming, or historically underserved.
Eligible stakeholders include federally-recognized Indian tribal organizations, state governments, local governments, nonprofit organizations, and higher education institutions. Interested stakeholders may submit one-to-two-year proposals and submit their applications by October 14, 2022.
Interested in more information?
Registration is also open for a webinar on using the tax calculator to estimate your tax burden. The webinar will be held at 2 p.m. EST August 15.
Producers interested in CRP TIP and other USDA programs should contact their local USDA Service Center to learn more or to apply for programs.