Tax Credit Expanded for Farmers

By Scout Nelson

The Minnesota Legislature has made an important decision to support new farmers by removing the funding cap on the Beginning Farmer Tax Credit for 2026. This move ensures that all eligible applications submitted before the deadlines can be approved this year. Earlier, the program followed a first come first served system, and funds were exhausted within just two days of opening applications.

Due to high demand, a waitlist was created. Applicants who have already applied will soon receive confirmation emails regarding their approval status. Those who have not yet applied still have time to submit their applications. Lease applications must be submitted by July 17, 2026, while applications related to sales can be submitted until November 1, 2026.

This program is designed to encourage experienced asset owners to support new farmers. Landlords and sellers who rent or sell farmland, livestock, equipment, or other agricultural assets to beginning farmers can benefit from tax credits. Both the asset owners and the beginning farmers must submit complete applications along with proper lease or sale of documents. In some cases, applications can be submitted before finalizing a sale if a valid purchase agreement is available.

Eligible asset owners include individuals, trusts, and certain business entities. Family members such as parents, grandparents, and siblings can also qualify for tax credits if they sell farmland to direct relatives. However, this condition does not apply to leases or sales of non-land assets.

A beginning farmer must be a Minnesota resident who has started farming within the last ten years or plans to begin farming. They must show positive financial projections, have a net worth below the required limit, and complete or enroll in a Farm Business Management program. More details can be found here.

Additionally, beginning farmers can receive a tax credit for their Farm Business Management tuition fees, up to a maximum of $1500 for three years. Full program details are available online.

Photo Credit: pexels-nataliya-vaitkevich