Beginning Farmer Tax Credit

The Agricultural Assets Transfer Tax Credit is commonly referred to as the Beginning Farmer Tax Credit. The 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, breeding livestock and buildings.

Application/Approval Procedures

• Submit a completed and signed copy of the Beginning Farmer Tax Credit (BFTC) Application & Instructions
  • Both asset owner and beginning farmer must fill out the joint application
  • Application instructions are available here.
• Include a copy of the signed lease agreement
• Beginning farmer must include a financial statement (dated within 30 days from receipt of application) signed by all applicants and witnessed by a bank officer
• Application fee for crop share applications will be increased to $200 for the application and $100 for each year of the lease to be collected at time of application
  • Example: If you are submitting an application with a 5-year lease, your fee to enter the program will be: $200 (Application fee) + $500 ($100 x 5 years of servicing) = $700
• Application fee for cash rent and flex lease applications will remain unchanged at $200 for the application and $50 for each year of the lease to be collected at time of application
  • Example: If you are submitting an application with a 5-year lease, your fee to enter the program will be: $200 (Application fee) + $250 ($50 x 5 years of servicing) = $450
• Include a copy of the USDA/FSA abbreviated 156 Farm Record form, showing asset owner as owner and beginning farmer as operator
• Completed applications are due to the IADD by the 1st of each month. Must submit no later than September 1st to be eligible to receive a credit for the current year.