Ohio becomes latest Midwest state to provide a tax credit for beginning farmers

A new tax credit program in Ohio aims to help the state’s beginning farmers, as well as those who help them get started in the business.

HB 95, which became law in April, includes $10 million in tax credits for new farmers who attend a financial management program run by the Ohio Department of Agriculture. Also eligible for the tax credits: established farmers who rent or sell agricultural assets (land, building and equipment) to beginning farmers. Businesses that sell such assets for a profit do not qualify.

Under the law, “certified beginning farmers” are either new to Ohio or have been farming in the state for less than 10 years. To qualify for the credit, they must demonstrate experience or adequate knowledge of agriculture; have an annual household net worth under $800,000 (an amount to be adjusted annually for inflation); and provide the majority of daily farm labor and management. Applicants for certification must also submit projected earnings and demonstrate profit potential.

Midwestern states with similar tax credit programs for beginning farmers include Iowa, Minnesota and Nebraska. Michigan legislators also are mulling a bill this year (SB 697) to create a tax credit for those selling or renting agricultural assets to beginning farmers. An Illinois bill to create an Ohio-style tax credit (HB 2750) was introduced in 2021 but did not advance.