Iowa Beginning Farmer Tax Credit Calculator

I created a couple worksheets in Google Docs to help calculate a comparison of the Iowa Beginning Farmer Tax Credit on a crop share basis and a cash rent basis. I wanted to share this worksheet to help others evaluate their options and make better decisions.

The main conclusion I’m seeing is that the amount of credit per acre is significantly higher with a crop share agreement than a cash rent agreement. A 50/50 crop share with a 163 yield and corn priced at $4.39 can generate about $50/acre in credit. However, cash rent of $300/acre will only generate a credit of $15/acre. Even cash rent at $500/acre will only yield a $25/acre credit.

Click Here for the worksheet (Go to File > Download As > .xlsx if you want to edit it in Microsoft Excel)

Or use the link below if you want to access it from the Google Docs Template gallery. This template link doesn’t seem to be working right in Internet Explorer. Just use the link above if you are having issues viewing this link in Internet Explorer.

NE and IA Beginning Farmer Tax Credits

For landowners that have qualified tenants, the benefits of the beginning farmer tax credit can be huge. Both Iowa and Nebraska have significant beginning farmer tax credits that can serve to offset your state income taxes.

The Iowa beginning farmer tax credit is calculated as 5% of cash rents or 15% of gross revenue from crop shares. A qualified beginning farmer is one that has net worth under $366,324 and has adequate education, training, or experience in their area of farming. For more information visit http://www.iada.state.ia.us/BFTC/.

The Nebraska beginning farmer tax credit is calculated as 10% of cash rents or 15% of gross revenue from crop shares.  A qualified beginning farmer has farmed or ranched for less than 10 of the last 15 years, has a net worth of less than $200,000, and will provide the majority of the daily physical labor and management for the farm. For more information visit http://www.nda.nebraska.gov/beg_farmer/taxcp.html.