Iowa Beginning Farmer Tax Credit
The program provides tax credits to owners of agricultural land and machinery who lease tham to beginning farmers. The tax credit is designed to encourage owners of these capital agricultural assets to lease them to Iowa’s qualifying beginning farmers. The program provides the agricultural asset owner a credit against Iowa income taxes owed.

The tax credit is 5 percent of the rental income received under a cash rental agreement, or 15 percent of the value owners’ share under a share agreement.

The agricultural asset owners may obtain a tax credit for each lease they have with a qualified beginning farmer. 

Agricultural land, improvements and depreciable property (machinery, equipment, and breeding livestock) located in the state of Iowa used for farming purposes.

The rental of a rural residence is not permitted. If a residence is part of the lease agreement, the lease value of the residence should be specifically identified so it can be excluded from tax credit calculations.

The rental of farmland that is enrolled in CRP is not permitted. If CRP land is part of the lease agreement, the lease value of the CRP ground should be specifically identified so it can be excluded from tax credit calculations.

Feeder cattle, feeder pigs, feeder lambs, feeder chickens or feeder turkeys do not qualify as depreciable property and as a result are not eligible under the program. Other animals such as horses or those classified as “exotic” are eligible if they are a viable “for profit” farming operation, are depreciable property under IRS code and not a “hobby farm.” 

Agricultural asset owners that lease agricultural land in the State of Iowa under the “Corporate Farming Law.” An individual may claim the tax credit of a partnership. LLC, S Corporation, estate, or trust by electing to have the income taxed directly to the individual. The amount of tax credit claimed by the individual shall be based upon the pro-rata share of the individual’s earnings from the partnership, LLC, S Corporation, estate or trust. 
A beginning farmer and agricultural asset owner must prepare and submit an application to the Iowa Ag. Development Authority. Application forms can be downloaded here and are available from the Authority or on the Authority’s website. The applications should be completed by the beginning farmer and the agricultural asset owner and submitted directly to the Authority. The completed application should be accompanied by the beginning farmer’s current financial statement and background letter and a copy of the agricultural asset lease and a completed and signed “Authorization For Release Of Confidential State Tax Information” signed by the agricultural asset owner.

Contact Iowa Beginning Farmer Tax Credit

David Baker
Farm Transition Specialist
10861 Douglas Ave
Suite B
Urbandale, Iowa  50322
Phone: 515-252-7814
Fax: 515-252-7828


Service Area

National Program

Office Locaters

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