By Andi Anderson
Ohio's Beginning Farmer Tax Credit Program presents a valuable opportunity for aspiring farmers and asset owners. Aimed at promoting fairness within Ohio's farming sector, this initiative extends income tax benefits to both novice farmers and those transferring farm assets. Launched in 2023, this program is slated until January 1, 2028, or until $10 million in tax credits are allocated. Effective utilization of this program demands strategic planning, making it prudent for both existing and new farmers to contemplate participation.
Understanding the nuances of this program is crucial, and our law bulletin, "Ohio's Beginning Farmer Tax Credit Program," serves as an invaluable guide. This bulletin meticulously delineates the program's functioning and the steps to qualify for its income tax credits. The process involves several vital components:
- Eligibility and Certification: To become a "qualified beginning farmer" certified by the Ohio Department of Agriculture (ODA), an individual must meet specific eligibility criteria, including residency, recent entry into farming, farming intention in Ohio, net worth restrictions, farming experience, and income sources. Completion of an ODA-approved financial management course is also mandatory.
- Certification Application: Upon completing the requisite financial management course, an individual must apply to the ODA for certification as a "qualified beginning farmer." The approval grants an income tax credit certificate, which can be utilized in the current tax year or carried forward for three succeeding tax years.
- Asset Transfer Incentives: For asset owners selling or leasing to a certified beginning farmer, the program offers a 3.99% Ohio income tax credit on the sale price or gross rental income. Agricultural assets encompass land in agricultural production, livestock, facilities, and machinery.
- Application Procedure: Asset owners must apply for the tax credit by submitting the Beginning Farmer Tax Credit Asset Transfer Form to the ODA, accompanied by the qualified beginning farmer's certification certificate.
The alignment of planning and timing is crucial for successful participation in the program. Prospective beginning farmers must complete certification before engaging in asset transfer. Coordinating program engagement with estate and transition plans is equally vital for existing asset owners. Seeking advice from professional advisors for the 2024 tax year is highly recommended. Now is the opportune time for strategic planning and consultation for optimal program involvement.
Photo Credit: Ohio Department of Agriculture
Categories: Ohio, Business