PA Offering Tax Credits For Start-Up Farmers

HARRISBURG, PA — Tax credits aimed to help farm start-ups are coming. Applications are now being accepted for a tax credit program intended to support Pennsylvania’s agriculture industry.

The program intends to help new farmers get established over the next 10 years.

The legislation has allocated millions starting with $5 million for 2020.

Sen. Bob Mensch (R-24) supported a bill that creates the Beginning Farmer Tax Credit Program. He explained the need for the program saying for every farmer under the age of 35 in Pennsylvania there are four farmers over the age of 65. Of the 7.7 million acres of farmland across the state, 41 percent is managed by a farmer 55 years of age or older. Only 11 percent of that land is expected to transfer in the next five years.

Senate Bill 478 (Act 65 of 2019) provides an incentive to landowners who lease or sell their land, buildings and equipment to beginning farmers. Landowners will receive a one-time personal income tax credit for the sale of property, or for a multi-year lease of property.

The legislation requires all leases be enforced through written agreements and that the sale of property be for fair market value in order to qualify for the tax credit.

The Department of Community and Economic Development, with the Departments of Agriculture and Revenue, will allocate up to $5 million in tax year 2020, and up to $6 million annually through the 2030 tax year. Complete program guidelines, eligibility, and application instructions can be found on DCED’s website, here.

Beginning farmers must meet eligibility criteria. Applications for certification, which are evaluated by the Department of Agriculture, can be found here. Applications for the tax credit can be filed here.

Information on Senator Mensch’s legislation can be found on his website.