Beginning Farmer Tax Credit Program:

The Beginning Farmer Loan Program is administered by the Iowa Agricultural Development Division and began with the 2007 tax year. The Beginning Farmer Tax Credit Program was enacted by the Iowa legislature during the 2006 legislative session as an incentive to keep land in production agriculture, by allowing agricultural asset owners to earn tax credit for leasing their land to beginning farmers. The program includes tax credit for the leasing of agricultural land, depreciable machinery or equipment and buildings.
 

Program Provisions

• Leases must be 2-5 years to qualify
• Renewable at expiration (if qualifications are met) with a 10 year maximum per taxpayer
• Tax Credit Amount is:
  • 5% of rental income received on cash rent leases
  • 15% of owners share on crop share agreement
  • 15% on any flex lease portion
• Lease value must not be substantially higher than market value for the area
• Related party transactions are accepted
• Only changes that benefit the beginning farmer will be allowed and must be approved by IADD
• The tax credit can be used for personal or corporate Iowa income taxes, however, the tax credit will be issued to the corporation