Beginning Farmer Tax Credit Program

Overview

Program provides tax credits to owners of agricultural assets who sell or rent agricultural assets to beginning farmers. The program is administered in consultation with the Department of Agriculture and the Department of Revenue.

Uses

An owner of agricultural assets is eligible for allocation of a tax credit equal to:

  1. 5% of the lesser of the sale price or fair market value of the agricultural asset, up to a maximum of $32,000; or
  2. 10% of the gross rental income of the first, second, and third year of the rental agreement, up to a maximum of $7,000 per year

Eligibility

Those eligible to apply for a Beginning Farmer Tax Credit must:

  1. Be an individual, trust, or pass-through entity that is the owner in fee of agricultural land or has legal title to any other agricultural asset
  2. Sell or lease agricultural assets to a Beginning Farmer
  3. Be subject to Personal Income Tax (Article III)
  4. Be in state tax compliance with the laws and regulations of the commonwealth as determined by the Department of Revenue

Funding

The commonwealth shall issue no more than $5,000,000 in tax credits for the taxable year beginning after December 31, 2019 and no more than $6,000,000 for the taxable years beginning December 31, 2020.

How to Apply

Applicants will apply through DCED’s electronic Single Application system. Applicants will also be required to complete the program addenda included as part of the Single Application. All applications will be reviewed on a first-come, first-served basis by date received.

Additional Information

The certification process for Beginning Farmers will begin on Monday, June 29th and last until the end of the calendar year. Certification documentation can be mailed to:

Department of Community & Economic Development
Center for Business Financing
Beginning Farmer Tax Credit Program
Commonwealth Keystone Building
400 North Street 4th Floor
Harrisburg, PA 17120
Beginning Farmer Certification Form
Beginning Farmer Recertification Form

The Electronic Clearance Form required by the Department of Revenue to determine tax compliance can be accessed on the PA Department of Revenue website.

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