Business and Financial
Barry Ward, Director, Income Tax Schools at The Ohio State University
Jeff Lewis J.D., Legal Associate, Agricultural and Resource Law Program, Income Tax Schools
The One Big Beautiful Bill (OBBB) Act (H.R. 1), was passed, signed and became law on July 4th. This Act impacts taxes and agricultural policy among a long list of other important issues. In this post, we list important tax provisions that were included in this legislation. Many of the provisions were law as a part of the Tax Cuts and Jobs Act and were extended and in some cases made permanent by this new Act. There were also a few new provisions that were included in this new legislation. This article will summarize the provisions that should prove to be most important to farmers and others with ag interests.
Qualified Business Income Deduction
The 20 percent Qualified Business Income Deduction (QBID) for sole proprietors and pass-through businesses under I.R.C. § 199A is made permanent by this Act. This includes the I.R.C. § 199A(g) deduction for agricultural cooperatives and their patrons.
This new legislation includes a new minimum $400 deduction for taxpayers with at least $1,000 in “active” qualified business income. Both amounts will be adjusted annually for inflation.
Estate and Gift Tax Exemption
This Act permanently increases the estate and gift tax exemption (basic exclusion or Unified Credit), beginning in 2026, to $15 million per person, indexed for inflation.
Individual Income Tax Rates
The OBBB Act permanently extends the tax rates and brackets enacted by the Tax Cuts and Jobs Act.
Standard Deduction
Beginning in 2025, this Act provides an increase in the Standard Deduction to $15,750 for singles, $23,625 for heads of household, and $31,500 for marrieds filing joint. This increased standard deduction is also made permanent.
Personal Exemption
The personal exemption is permanently repealed by this Act.
Temporary Deduction for Seniors
The OBBB Act provides seniors (those 65 years of age and older) with an additional $6,000 deduction for tax years 2025-2028. Married seniors filing joint returns are entitled to the deduction, as long as they meet the income requirements.
The deduction is available for seniors who take the standard deduction or for those who itemize deductions but does begin to phase out for taxpayers with incomes of $75,000 (single) or $150,000 (MFJ).
Child Tax Credit and Other Dependent Credit
The Act permanently creates a child tax credit of $2,200 (adjusted for inflation) (beginning in 2025) for qualifying children under 17. (Income phase-out thresholds - $200,000 for singles and $400,000 for MFJ). The legislation also makes permanent the $1,400 refundable portion of the credit, indexed for inflation.
The Act also makes permanent the $500 nonrefundable credit for other dependents who do not qualify for the child tax credit, including those over the age of 16.
Additional First Year (Bonus) Depreciation Changes
The OBBB Act permanently increases bonus depreciation to 100 percent for property acquired after January 19, 2025. For property placed in service during the first taxable year ending after January 19, 2025, the taxpayer can elect to use 40 percent bonus depreciation. These provisions also apply to trees and vines planted or grafted after January 19, 2025.
Section 179 Expense Enhancements
The Act permanently increases the maximum Section 179 deduction to $2,500,000 and increases the phaseout threshold amount to $4,000,000 for property placed in services in taxable years beginning after 2024. These amounts will be indexed for inflation after 2025.
Exception from Limit on Business Meal Deduction
The 50 percent deduction for meals for the convenience of employers is scheduled to end at the end of 2025.
1099-MISC and 1099-NEC Requirements
The new law increases the payment threshold to $2,000 per payee to file 1099-MISC and 1099-NEC information returns, beginning with payments made in the 2026 tax year. The current threshold of $600 per payee remains in effect for the 2025 tax year. Reminder: Copies of the Form 1099-NEC or 1099-MISC must also be provided to payees.
1099-K Requirements
The OBBB Act also settles the confusion surrounding 1099-K reporting requirements. The Act provides that third-party settlement organizations are not required to issue a payee a 1099-K unless the payee receives over $20,000 in total payments and conducts more than 200 transactions in a year.
Gain from the Sale or Exchange of Farmland Property to Qualified Farmers
The OBBB Act creates a new election for those selling farmland property to a qualified farmer (an individual who is actively engaged in farming). This election allows the seller to choose to pay their taxes on the gain in four equal installments. The election is available to individuals and other entities that have either farmed the property or leased it to a qualified farmer for 10 years prior to the sale.
The seller can only make the election if the land is subject to a covenant or other legally enforceable restriction which prohibits the use of the property other than as a farm for farming purposes for 10 years after the date of the sale or exchange. A copy of the covenant must be filed with the first tax return.
This provision is effective for sales or exchanges occurring in tax years beginning after July 4, 2025.
Clean Fuel Production Credit
The Act extends the clean fuel production credit under I.R.C. § 45Z for fuel sold through December 31, 2029 but the Act restricts the credit to fuel produced from domestic feedstocks. It also reduces the credit for sustainable aviation fuel from $1.75 per gallon to $1.00 per gallon after 2025.
Carbon Oxide Capture and Sequestration Credit
The current I.R.C. § 45Q carbon oxide sequestration credit remains intact as a part of this Act. It does add a provision to allow all uses (not just sequestration) to receive the same $85/ton rate. The credit is not scheduled to expire until 2033.
Clean Vehicle Credits
The Act ends clean vehicle tax credits for all vehicles purchased after September 30, 2025. The Act also ends the alternative fuel vehicle refueling property credit for property acquired after June 30, 2026.
This article highlights tax provisions that should be of primary interest to those involved in farming and agriculture. This article does not summarize all tax provisions found in the OBBB Act. Information on all provisions found in this Act can be found at Congress.Gov by viewing a summary of the Act: https://www.congress.gov/bill/119th-congress/house-bill/1
Reference: One Big Beautiful Bill Act Implements Significant Tax Package, Iowa State University, Center for Agricultural Law and Taxation, Kristine A. Tidgren, July 9, 2025
Barry Ward, Leader, Production Business Management
The Western Ohio Cropland Values and Cash Rents study was conducted from January through April in 2025. This opinion-based study surveyed professionals with a knowledge of Ohio’s cropland values and rental rates. Professionals surveyed were rural appraisers, agricultural lenders, professional farm managers, ag business professionals, OSU Extension educators, farmers, landowners, and government personnel.
The study results are based on 145 surveys. Respondents were asked to group their estimates based on three land quality classes: average, top, and bottom. Within each land-quality class, respondents were asked to estimate average corn and soybean yields for a five-year period based on typical farming practices. Survey respondents were also asked to estimate current bare cropland values and cash rents negotiated in the current or recent year for each land-quality class. Survey results were summarized for western Ohio with regional summaries (subsets of western Ohio) for northwest Ohio and southwest Ohio.
Results from the Western Ohio Cropland Values and Cash Rents Survey show cropland values in western Ohio are expected to increase in 2025 by 0.6 to 4.1 percent depending on the region and land class. Cash rents are expected to increase from 0.9 to 1.9 percent in 2025 depending on the region and land class. Decreasing profit margins continue to put downward pressure on cropland values and cash rents while still reasonable farm equity positions and increasing property taxes continue to support values and rents. Cropland values and cash rents are expected to increase minimally in 2025 although further decreases in crop prices and projected profit margins may put further downward pressure on both cropland values and rents.
Factors Affecting Land Values/Cash Rental Rates
Ohio cropland varies significantly in its production capabilities and, consequently, cropland values and cash rents vary widely throughout the state. Generally, western Ohio cropland values and cash rents differ from much of southern and eastern Ohio cropland values and cash rents. The primary factors affecting these values and rents are land productivity and potential crop return, and the variability of those crop returns. Soils, fertility and drainage/irrigation capabilities are primary factors that most influence land productivity, crop return and variability of those crop returns.
Other factors impacting land values and cash rents may include field size and shape, field accessibility, market access, local market prices, field perimeter characteristics and potential for wildlife damage, buildings and grain storage, previous tillage system and crops, tolerant/resistant weed populations, USDA Program Yields, population density, and competition for the cropland in a region. Factors specific to cash rental rates may include services provided by the operator and specific conditions of the lease.
Ultimately, supply and demand of cropland for purchase or rent determines the value or cash rental rate for each parcel. The expected return from producing crops on a farm parcel and the variability of that return are the primary drivers in determining the value or rental rate.
Western Ohio Results
Average Cropland
Survey results from Western Ohio for average producing cropland showed an average yield to be 188.7 bushels of corn per acre. Results showed that the value of average cropland in western Ohio was $11,604 per acre in 2024. According to survey data, average producing cropland is expected to be valued at $11,856 per acre in 2025. This is a projected increase of 2.2% percent.
Average cropland rented for an average of $232 per acre in 2024 according to survey results. Average cropland is expected to rent for $235 per acre in 2025 which amounts to a 1.3 percent increase in cash rent year-over-year. This 2025 rental rate projection of $235 per acre equates to a cash rent of $1.25 per bushel of corn produced. Rents in the average cropland category are expected to equal 2.0 percent of land value in 2025.
Top Cropland
Survey results indicated top performing cropland in western Ohio averaged 224.0 bushels of corn produced per acre and the average value of top cropland in 2024 was $13,935 per acre. According to this survey, top cropland in western Ohio is expected to be valued at $14,384 per acre in 2025. This is a projected increase of 3.2 percent.
Top cropland in western Ohio rented for an average of $289 per acre in 2024 according to survey results. Top cropland is expected to rent for an average of $293 per acre in 2025 (an increase of 1.4 percent) which equates to a cash rent of $1.31 per bushel of corn produced. Rents in the top cropland category are expected to equal 2.0 percent of land value in 2025.
Bottom Cropland
The survey summary showed the average yield for bottom performing cropland to be 157.7 bushels of corn per acre, with the average value of bottom cropland as $9,306 per acre in 2024. According to survey data, this bottom producing cropland is expected to be valued at $9,434 per acre in 2025. This is an increase of 1.4 percent.
Bottom cropland rented for an average of $185 per acre in 2024 according to survey results. Cash rent for bottom cropland is expected to average $187 per acre in 2025 which amounts to a 1.1 percent increase in cash rent year-over-year. This 2025 rent projection of $187 per acre equates to a cash rent of $1.19 per bushel of corn produced in 2025. Rents in the bottom cropland category are expected to equal 2.0 percent of land value in 2025.
Results from Western Ohio are included in Table 1 below:
Further survey results including details on the two sub-regions of the survey area, interest rate projections and other results are available in the full publications posted on the Fam Office site: https://farmoffice.osu.edu/farm-management-tools/farm-management-publications/cash-rents
As we await the 2025 harvest and think ahead to 2026 farm leases, now is a good time for our annual Ohio Farmland Leasing Update. We've scheduled the webinar for Friday, August 15, 2025 at 10:00 a.m. as a special edition of our Farm Office Live webinar series.
Our team will address economic and legal information that affects Ohio farmland leasing, including the latest information on these topics:
- Cash Rent Outlook – Survey Data and Key Issues Impacting Change
- Legal Issues and Requirements for Terminating a Farmland Lease
- Drafting Farm Leases for Drainage Tile Improvements
- Leasing the Pore Space Beneath Your Farmland
- Farmland Leasing Resources
Our speakers for the webinar include:
- Barry Ward, Leader, OSU Production Business Management
- Peggy Kirk Hall, Attorney, OSU Agricultural & Resource Law Program
- Robert Moore, Attorney, OSU Agricultural & Resource Law Program
There is no cost to attend the Ohio Farmland Leasing Update, but registration is necessary unless you're already registered for theFarm Office Live webinars. To register, visit go.osu.edu/register4fol.
Tags: farm leasing, farmland leasing update, farmland leasing webinar, farm leases
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By: Carl Zulauf, Seungki Lee, and David Marrison, Ohio State University, June 2025
Click here for PDF version of the article
Estimates of payments by ARC-CO (Agriculture Risk Coverage – County version) for the 2024 crop year use county yield estimates from USDA, RMA (US Department of Agriculture, Risk Management Agency) (https://webapp.rma.usda.gov/apps/RIRS/SCOYieldsRevenuesPaymentIndicators.aspx). Legislation requires FSA (Farm Service Agency) to give primacy to RMA yields when determining ARC-CO payment, but other factors can be considered. Thus, these ARC-CO payment estimates are likely to be closer to the FSA payment rate than the payment estimates made in May 2025 using county yield estimates from USDA, NASS (National Agricultural Statistics Service) (https://quickstats.nass.usda.gov/). Other data used to makes these payment estimates are 2024 crop year program parameters and market year price estimates from USDA, FSA (https://www.fsa.usda.gov/resources/programs/arc-plc/program-data).
FSA is expected to release official payment rates in October 2025. They can differ notably from estimates. Market year prices and county yields are not final. They are also currently in a range where small changes can cause large changes in ARC-CO payment rates. Use the estimates with caution.
June 2025 Estimates of 2024 Crop Year Payments:
- ARC-CO: Ohio corn and soybean payments are expected for some counties. As a revenue program, ARC-CO payment calculations include yield. 2024 Ohio weather was highly variable. Yields and thus county payment rates will be variable. Payment estimates per base acre vary from $0 (50 counties) to $81 (Ross and Highland) for corn base and from $0 (17 counties) to $60 (Mercer) for soybean base (see appended maps). These estimates include the 85% payment factor (i.e. 15% payment reduction factor). Also appended are maps of county gross revenue (estimated price times estimated yield) plus estimated ARC-CO pay rate per acre. They illustrate that ARC-CO payments are countercyclical to low market revenue (correlation between total revenue and ARC-CO pay rate is negative). Higher revenue/yields are thus almost always preferred to an ARC-CO payment. Note, some counties have irrigated and non-irrigated base acres. Payment estimates are only for non-irrigated base since dryland production is far more common in Ohio.
- PLC: At present, no PLC payment is expected for corn, soybeans, and wheat. Projected US market year price is not below the effective reference price: corn ($4.35 vs. $4.01), soybeans ($9.95 vs. $9.26), and wheat ($5.50 vs. $5.50).
Commodity Program Policy Objective:
- ARC-CO provides assistance if a crop’s county market revenue is below 86% of a crop’s county benchmark market revenue for 5 recent crop years.
- PLC provides assistance if a crop’s US market year price is below 100% of the crop’s US effective reference price set by Congress.
- ARC-IC provides assistance if an ARC-IC farm’s average per acre revenue from all program crops is below 86% of the ARC-IC farm’s per acre benchmark revenue.
Payment Formulas (* = times):
ARC-CO payment rate per base acre = MAX [$0, or 86% times (county benchmark revenue - observed revenue)] * 85% payment factor. County benchmark revenue = (5-year Olympic average (high and low value removed) of recent US market year prices * 5-year Olympic average of recent trend-adjusted county yields). Observed revenue = observed US crop year price * observed county yield. ARC-CO payment rate is capped at 10% of county benchmark revenue.
PLC payment rate per base acre = MAX [$0, or (US effective reference price – US market year price) * a farm’s PLC base yield * 85% payment factor.
Note: Counties labeled as $0 but colored in red are estimated to have non-zero payments of less than $1. Counties colored in white are estimated to receive no payment. Counties in gray are not processed due to missing FSA yield data.
Note: Counties labeled as $0 but colored in red are estimated to have non-zero payments of less than $1. Counties colored in white are estimated to receive no payment. Counties in gray are not processed due to missing FSA yield data.
Ohio Crop Returns Outlook for 2025 - Final Crop Enterprise Budgets for 2025
Barry Ward, Leader, Production Business Management
Lower crop prices and a mix of higher and lower input costs have set the stage for another challenging profit outlook for Ohio commodity crops in 2025. Supply and demand fundamentals have both continued to negatively affect commodity crop prices. Some input costs are projected to be higher while some are expected to be steady to lower. The result of this set of economic fundamentals is an outlook for low to negative margins for the 2025 corn, soybean and wheat crops.
Production costs for Ohio field crops are forecast to be steady to slightly higher than last year with higher machinery and equipment costs leading the way. Lower crop protection chemical prices are offset by an expected increase in product need. Fuel and crop insurance costs are also projected to be slightly lower but land rents continue to increase on average.
Variable costs for corn in Ohio for 2025 are projected to range from $502 to $614 per acre depending on land productivity. The trend line corn yield (190.1 bpa) scenario included in the corn enterprise budget shows an increase in variable costs of 2.4% with an increase in fixed costs of 3.4% due to higher rents and machinery/equipment costs.
Variable costs for 2025 Ohio soybeans are projected to range from $264 to $298 per acre. Variable costs for trend-line soybeans (56.8 bpa) are expected to decrease 2% in 2025 compared to 2024 while fixed costs are expected to increase 2.9% in 2025.
Wheat variable expenses for 2025 are projected to range from $231 to $288 per acre. The trend line wheat yield (81.5 bpa) scenario included in the wheat enterprise budget shows a decrease in variable costs of 2.3% with an increase in fixed costs of 2.7%.
Returns will be mixed depending on crop price change throughout the rest of the year. Grain prices used as assumptions in the 2025 crop enterprise budgets are $4.20/bushel for corn, $10.20/bushel for soybeans and $6.00/bushel for wheat (wheat price set in October using the September ’25 Futures price at that time).
Projected returns above variable costs (contribution margin) range from $137 to $344 per acre for corn and $200 to $398 per acre for soybeans. Projected returns above variable costs for wheat range from $160 to $299 per acre although significant crop price decreases since last fall (when the price was set for this enterprise budget) will likely cause wheat to be less profitable than these return projections indicate.
Return to Land is a measure calculated to assist in land rental and purchase decision making. The measure is calculated by starting with total receipts or revenue from the crop and subtracting all expenses except the land expense. Returns to Land for Ohio corn (Total receipts minus total costs except land cost) are projected to range from -$73 to $118 per acre in 2025 depending on land production capabilities. Returns to land for Ohio soybeans are expected to range from $51 to $237 per acre depending on land production capabilities. Returns to land for wheat (not including straw or double-crop returns) are projected to range from $42 per acre to $171 per acre assuming a planting-time price of $6/bushel. If a current forward harvest price for wheat of $5.25/bushel is used, the Return to Land is in a lower range of -$5 to $101 per acre depending on land production capabilities.
Total costs projected for trend line corn production in Ohio are estimated to be $1021 per acre. This includes all variable costs as well as fixed costs (or overhead if you prefer) including machinery, labor, management and land costs. Fixed machinery costs of $109 per acre include depreciation, interest, insurance and housing. A land charge of $241 per acre is based on data from the Western Ohio Cropland Values and Cash Rents Survey Summary. Labor and management costs combined are calculated at $84 per acre. Details of budget assumptions and numbers can be found in footnotes included in each budget.
Total costs projected for trend line soybean production in Ohio are estimated to be $677 per acre. (Fixed machinery costs: $88 per acre, land charge: $241 per acre, labor and management costs combined: $50 per acre.)
Total costs projected for trend line wheat production in Ohio are estimated to be $620 per acre. (Fixed machinery costs: $58 per acre, land charge: $241 per acre, labor and management costs combined: $51 per acre.)
Data used to compile these enterprise budgets includes research, surveys, market data, economic modeling, calculations and experience of authors.
Current budget analyses indicates less favorable returns for all three primary commodity crops in Ohio for 2025 but crop price change and harvest yields may alter this outcome. These projections are based on OSU Extension Ohio Crop Enterprise Budgets. Newly updated Enterprise Budgets for 2025 have been completed and posted to the Farm Office website: https://farmoffice.osu.edu/farm-management/enterprise-budgets
Guest author: Dr. Carl Zulauf, Professor Emeritus, Department of Agricultural, Environmental, and Development Economics, Ohio State University.
Note: The U.S. House of Representatives passed its budget reconciliation bill on May 22, 2025. Prior to the bill’s passage, the budget reconciliation process required the House Agriculture Committee to reduce spending by $230 billion over the 10-year budget period. The committee’s final proposed provisions for doing so, which represents the Farm Bill attention we’ve long awaited, were included in the budget reconciliation bill passed by the House. Thank you to our guest author and Farm Bill expert, Dr. Carl Zulauf, for the following summary of the House's proposed Farm Bill changes that now move over to the Senate for consideration.
1. Supplemental Nutrition Assistance Program (SNAP)
- Secretary of Agriculture shall not increase cost of the thrifty food plan based on a reevaluation or update of its composition.
- Cost of thrifty food plan indexed for CPI inflation.
- Work requirements are increased.
- Required state matching share goes from 0% currently to 5% in Fiscal Year (FY) 2028. This cuts Federal spending without cutting program benefits.
- Matching share increases as state’s SNAP error rate increases. Matching share can be as high as 25%.
2. Farm Safety Net
Support Prices
- Separate program for temperate japonica rice appears to have been terminated.
- Starting with 2031 crop year, prior year reference price increased by multiplying it by 1.005.
- In no year can a reference price exceed 115% of its 2026-2030 statutory value, so adjustment does not apply if reference price escalator is at its maximum.
- For long grain and medium grain rice, marketing loans repaid at prevailing world market price.
- For upland cotton, marketing loans repaid at lowest prevailing world market price.
- For upland cotton, a refund shall be provided to producer equal to difference between the lowest prevailing world market price and the repayment amount.
- For 2026-2031 crop years, upland cotton and extra-long staple cotton shall receive storage payments equal to the lessor of the submitted tariff rate for the marketing year or $4.90 for California and Arizona or $3.00 for other states.
- Textile mill assistance equals 3 cents / pound until July 31, 2025; 5 cents / pound thereafter.
Additional Base Acres
- Up to 30 million new base acres can be added by eligible farms.
- Only farms that planted or prevent planted a crop over 2019-2023 can add new base acres.
- An eligible farm is a farm for which 2019-2023 crop year average program commodity acres planted or prevent planted plus lesser of (a) 15% of farm’s total acres or (b) 2019-2023 crop year average acres planted or prevent planted to commodities other than program commodities, trees, bushes, vines, grass, or pasture (including cropland that was idle or fallow) exceeds the farm’s base acres as of September 30, 2024 excluding unassigned cotton base acres. 5-year average includes years with no acres planted or prevent planted. Positive difference is farm’s potential new base acres; includes unassigned cotton base.
- New base acre are allocated among covered commodities using the ratio of 2019-2023 average acres planted or prevent planted to covered crops on the farm to the 5-year average of covered crops planted or prevent planted plus new base acres.
- If multiple covered crops were grown on a given acre in any year from 2019-2023 (other than a covered crop produced under an established practice of double cropping), the owner elects which of the covered crop is included in potential new base.
- A farm’s total base acres after adding new base acres cannot exceed the farm’s total acres.
- Pro-rating occurs if total eligible new base acres exceed 30,000,000. Each eligible farm’s new base acres is reduced by an across-the board share so new base acres total 30 milion.
- Assessment: Farm Service Agency (FSA) reported roughly 270 million base acres for 2019 crop year after excluding unassigned cotton base acres of roughly 3 million. Sum of average National Agriculture Statistics Service planted acres plus average FSA prevent plant acres to current program crops over 2019-2023 equal roughly 264 million, implying approximately 24 million acres (264 + 30 – 270) of current non-covered crops, including unassigned cotton base acres, could be added to US base acres. This is a major expansion of commodity program payments to current noncovered crops.
Price Loss Coverage (PLC) Payment Yield
- Beginning with crop year 2026, PLC payment yields for new base acres on a farm are current PLC payment yields for the farm. If the farm has no current payment yield for a crop, PLC payment yield for the farm is set equal to average payment yield for the county in which the farm is situated or is determined using existing methods if no PLC yield exists.
Producer Election
- Annual producer election is extended through 2031 crop year.
- If no election is made, default choice is the same coverage for each covered commodity as existed for 2024 crop year.
Agriculture Risk Coverage
- Coverage level is increased from 86% to 90% beginning with the 2025 crop year.
- Payment cap per base acre is increased from 10% to 12.5% of the benchmark revenue beginning with the 2025 crop year.
Special Rule for Seed Cotton and Corn
- In determining the maximum payment rate for ARC-CO and PLC, the current year price can be no lower than $0.30 / pound for seed cotton and ‘$3.30 / bushel for corn.
- No marketing loan rate can be established for seed cotton.’’
Payment Limits
- Increases number of potential payment entities on a farm by expanding entities designated as qualified pass-through entities
- Increases per person payment entity from ‘$125,000 ’to ‘$155,000.
- Payment limit is indexed to CPI inflation.
- Payment limit waived if 75% or more of the average gross income of the person or legal entity is derived from farming, ranching, or silviculture activities.
Sugar Program
- Sets loan rate for raw cane sugar for 2025-2031 crop years at 24.00 cents / pound and for beet sugar at 136.55% of the raw cane sugar loan rate.
- Adjusts rate for storing sugar forfeited to the government.
- Changes beet sugar allotments.
Dairy Margin Coverage
- Updates production history to highest annual milk marketing during any one of the 2021, 2022, or 2023 calendar years.
- Raises maximum coverage from 5 million to 6 million pounds.
Livestock and Tree Loss Assistance
- Payment rate for losses due to predation is 100% of market value of affected livestock.
- Payment rate for losses due to adverse weather or disease is 75% of market value of affected livestock.
- Adds payment for unborn livestock.
- For livestock forage disaster program, changes eligibility from 8 consecutive weeks to 4 consecutive weeks or 7 of 8 consecutive weeks. Payments can be received for 2 months of losses instead of current 1 month of losses.
- Adds assistance for losses of farm-raised fish due to piscivorous birds.
- Changes determination of normal mortality rate for tree losses and honeybee colony losses.
3. Crop Insurance
Premium Subsidy
- Sets highest coverage level at 85% for individual yield or revenue insurance, 90% for individual yield or revenue insurance aggregated across multiple commodities, and 95% for area yield or revenue insurance.
- Increases coverage level for Supplemental Coverage Option (SCO) from 86% to 90%.
- Increases premium subsidy for SCO from 65% to 80%.
Administrative and Operating (A&O) Expenses:
- Beginning with the 2026 reinsurance year, an additional A&O subsidy is to be paid to insurance providers for eligible contracts. Amount is 6% of net book premium. Eligible contract is a crop insurance contract in an eligible State. Excluded are catastrophic risk contracts, area-based or similar contracts; and a contract that the provider does not incur loss adjustment expenses as determined by the Corporation. Eligible state is a state in Group 2 or Group 3 as defined in the Standard Reinsurance Agreement for reinsurance year 2026) and eligible contract’s loss ratio exceeds 120% of total net book premium written by all approved insurance providers.
- Beginning with 2026 reinsurance year, A&O reimbursement to approved insurance providers and agents for Specialty Crops shall be at least 17% of premium used to define loss ratio A&O reimbursements for contracts covering agricultural commodities subject to an increase during 2011-2015 reinsurance years are to be adjusted for inflation in a manner consistent with the 2011-2015 increases. For 2026 reinsurance year, inflation adjustment shall not exceed the percentage change for the preceding reinsurance year included in Consumer Price Index for All Urban Consumers.
- Increases funds for monitoring program compliance and integrity from current $0.004 billion per FY to $0.006 billion per FY plus $0.01 billion for a related statute for FY2026 and after.
- Authorizes creation of a Poultry Insurance Pilot Program. Alabama, Arkansas, and Mississippi must be included.
Beginning and Veteran Farmers and Ranchers
- Extends eligibility to 10 years from 5 years.
- Increases subsidy assistance from 10 percentage points to 15 percentage points for 1st and 2nd reinsurance years, 13 percentage points for 3rd reinsurance year, 11 percentage points for 4th reinsurance year, and 10 percentage points for 5th - 10th reinsurance years.
4. Conservation
- Authorizes funding for Environmental Quality Incentives Program ($2.7 billion for FY2026 to $3.3 billion for FY2028 – 2031); Conservation Stewardship Program ($1.3 billion for FY2026 to $1.4 billion for FY2029 – 31); Agricultural Conservation Easement Program ($0.625 billion for FY2026 to $0.700 billion in FY2029 – 2031); and Regional Conservation Partnership Program ( $0.425 billion for FY2026 to $0.450 billion for FY2027 – 2031).
- Authorizes funds for Watershed Protection and Flood Prevention ($150 million / year). Voluntary Public Access and Habitat Incentive Program ($10 million / year), Feral Swine Eradication and Control Pilot Program ($15 million / year), and Grassroots Source Water Protection Program ($1 million through FY2031).
5. Trade
- Authorizes funds through FY 2031 for trade promotion programs: Market Access Program, $0.40 billion / year; Foreign Market Development Cooperator Program, $0.07 billion / year; E (Kika) De La Garza Emerging Markets Program, $0.008 billion / year; Technical Assistance for Specialty Crops, $0.009 billion / year; and Priority Trade Fund, $0.0035 billion / year.
- Gives Secretary of Agriculture discretion to provide a greater allocation to a program(s) for which amount requested exceeds available funding but should try to support exports of types of commodities that funds were originally allocated.
6. Research
- Authorizes funds for Urban, Indoor, and Other Emerging Agricultural Production Research, Education, and Extension Initiative, Foundation for Food and Agriculture Research, Scholarships for Students at 1890 Institutions, Assistive Technology Program for Farmers with Disabilities, Specialty Crop Research Initiative, and Research Facilities Act.
- Extends certain provisions of Secure Rural Schools & Community Self-Determination Act of 2000.
- Rescinds unobligated balances of Competitive Grants for Non-Federal Forest Landowners program and State and Private Forestry Conservation Programs.
7. Energy
- Extends Biobased Markets Program and Bioenergy Program for Advanced Biofuels through 2031.
8. Other
- Authorizes funding for Plant Pest and Disease Management and Disaster Prevention, Specialty Crop Block Grants, Organic Production and Market Data Initiative, Modernization and Improvement of International Trade Technology Systems and Data Collection, National Organic Certification Cost Share Program, and Multiple Crop and Pesticide Use Survey.
- Authorized funding for Animal Disease Prevention and Management Program and Sheep Production and Marketing Grant Program.
- Extends Pima Agriculture Cotton Trust Fund, Agriculture Wool Apparel Manufacturers Trust Fund, Wool Research and Promotion, and Emergency Citrus Disease Research and Development Trust Fund through 2031.
Tags: budget reconciliation, farm bill, policy
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The classification of workers as either independent contractors or employees has once again become a focal point of federal labor policy, reflecting the broader ideological shifts that accompany changes in presidential administrations. With the transition to new leadership in the White House, the U.S. Department of Labor (“DOL”) has issued new guidance that redefines the criteria used to determine worker status. This latest interpretation marks a departure from the 2024 Democratic rule (the “2024 Rule”), instead embracing a model more consistent with prior Republican approaches. The change has significant ripple effects for employers and workers as it influences everything from wage protections to benefits eligibility and legal liability.
On May 1, 2025, the DOL’s Wage and Hour Division (“WHD”) issued Field Assistance Bulletin No. 2025-1(the “2025 Bulletin”), offering updated guidance on how to assess whether a worker qualifies as an employee or independent contractor under the Fair Labor Standards Act (“FLSA”).
The 2025 Bulletin explicitly states that the WHD will no longer apply the analytical framework established by the 2024 Rule when evaluating worker classification under the FLSA. Instead, the WHD will rely on the standards set forth in Fact Sheet #13 (July 2008) and Opinion Letter FLSA2019-6 (referred to as the “2008 Guidance” and “2019 Guidance,” respectively). However, the 2025 Bulletin clarifies that the 2024 Rule remains applicable in the context of private litigation.
The History of the Independent Contractor Revolving Door
The 2025 Guidance marks the latest development in a long-running pattern of revolving labor policy, reflecting the political priorities of successive presidential administrations. The 2024 Rule had previously replaced the Trump Administration’s 2021 Rule (the “2021 Rule”), which aimed to simplify the employee-versus-independent contractor analysis under the FLSA. The 2021 Rule emphasized two “core factors” of the traditional multifactor economic realities test: (1) the nature and degree of control over the work, and (2) the worker’s opportunity for profit or loss. By prioritizing these elements, the Trump-era rule created a more employer-friendly framework that often favored independent contractor classification.
The 2024 Rule reinstated the “totality of the circumstances” approach to the economic realities test, treating all factors with equal weight rather than prioritizing any single one. By doing so, the WHD assessed worker classification by holistically evaluating all six factors of the test. This broader, more balanced analysis often leaned toward classifying workers as employees, particularly in cases where multiple factors pointed to economic dependence on the employer.
While the Trump Administration previously issued a rule emphasizing a two “core factors” approach to worker classification, neither the 2025 Bulletin nor the 2008 and 2019 Guidance documents it references adopt that framework explicitly. Instead, the 2025 Bulletin affirms the DOL’s departure from the Biden-era 2024 Rule and suggests that additional rulemaking may be forthcoming, signaling continued evolution in the DOL’s enforcement strategy.
DOL Enforcement v. Private Litigation
It’s essential to understand the scope of the 2025 Bulletin’s applicability. As previously discussed, the 2025 Bulletin eliminates the use of the 2024 Rule in WHD investigations and classifications, even though that rule remains effective in private litigation. The distinction between these two contexts – WHD investigations and private lawsuits – centers on who initiates the action, the underlying purpose, and the legal procedures involved.
WHD Investigation
- Initiated by: The U.S. Department of Labor’s Wage and Hour Division
- Purpose: To enforce federal labor laws, such as the FLSA, by ensuring employers comply with minimum wage, overtime, and classification rules.
- Process: WHD investigators may conduct audits, review payroll records, and interview employees. These investigations can be random, complaint-driven, or targeted based on industry trends.
- Outcome: If violations are found, the WHD may seek back wages, penalties, or require changes in employment practices. Employers can settle disputes administratively without going to court.
Private Litigation
- Initiated by: An individual worker or group of workers
- Purpose: To seek compensation for alleged violations of labor laws, such as unpaid wages or misclassification.
- Process: The case is filed in court, and both parties engage in litigation, which may include discovery, motions, and potentially a trial.
- Outcome: A judge or jury determines liability and damages. The court may award back pay, liquidated damages, attorney’s fees, and other relief.
Practical Implications
For private employment matters, employers should continue to follow the 2024 Rule, as it remains the governing standard in litigation. The 2025 Bulletin applies only in the context of WHD investigations. While future rulemaking could align the DOL’s position more closely with the 2021 Rule – potentially establishing a new nationwide standard – it is essential for employers to stay informed about ongoing developments relating to worker classification. Misclassifying a worker, even unintentionally, can lead to significant financial penalties under both federal and state laws and may jeopardize the long-term stability of your business.
(Side note: Adding to the complexity of this situation is the U.S. Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, which overturned the Chevron doctrine and could have far-reaching implications for how the DOL approaches worker classification. However, the full impact of that ruling warrants a deeper discussion – one best served for a future blog post.)
For more information on the 2024 Rule and worker classification, check out our previous blog post here.
Tags: FLSA, Independent Contractor, Worker Classification, Employee, labor, employment, Ag Labor
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Authored by: Carl Zulauf, Seungki Lee, and David Marrison, Ohio State University, May 2025
Click here for PDF version of this paper
This paper provides estimates of expected payments by the ARC-CO (Agriculture Risk Coverage – County version) and PLC (Price Loss Coverage) commodity programs for the 2024 crop year.
Official payment rates are expected in October 2025. They can deviate notably from estimates as final prices and yields are yet known. Prices and yields, particularly for ARC-CO, are in a range where small changes can cause large changes in payment rates. Use the estimates with caution.
The estimates use 2024 crop year program parameters from USDA, FSA (US Department of Agriculture, Farm Service Agency), and latest available data for 2024 market year price estimates from USDA, FSA and county yield estimates from USDA, NASS (National Agricultural Statistics Service).
May 2025 Estimates of 2024 Crop Year Payments:
- ARC-CO: Ohio corn and soybean payments are expected for at least some counties. As a revenue program, ARC-CO payment calculations include yield. 2024 Ohio weather was highly variable. Yields and thus county payment rates will be variable. Some counties have irrigated and non-irrigated base acres. Payment estimates are calculated only for non-irrigated base since dryland production is far more common in Ohio. Payment estimates per base acre vary from $0 (21 counties) to $90 (Greene) for corn base and from $0 (13 counties) to $58 (Fairfield) for soybean base (see appended maps). These estimates include the 85% payment factor (i.e. 15% payment reduction factor). No estimate is available for corn and soybeans in 24 and 15 counties. A common reason is that too few farmers in the county responded to the NASS survey to estimate yield with statistical confidence. County NASS yields are not available for wheat. Also appended are maps of county gross revenue (estimated price times estimated yield) plus estimated ARC-CO pay rate per acre. They illustrate that ARC-CO payments are countercyclical to low market revenue (correlation between total revenue and ARC-CO pay rate is roughly -0.30). Higher revenue/yields are almost always preferred to an ARC-CO payment.
- PLC: At present, no PLC payments are expected for corn, soybeans, and wheat as the current estimate of US market year price is not below the effective reference price: corn ($4.35 vs. $4.01), soybeans ($9.95 vs. $9.26), and wheat ($5.50 vs. $5.50).
Commodity Program Policy Objective:
- ARC-CO provides assistance if a crop’s county market revenue is below 86% of a crop’s county benchmark market revenue for 5 recent crop years.
- PLC provides assistance if a crop’s US market year price is below 100% of the crop’s US effective reference price set by Congress.
- ARC-IC provides assistance if an ARC-IC farm’s average per acre revenue from all program crops is below 86% of the ARC-IC farm’s per acre benchmark revenue.
Payment Formulas:
ARC-CO payment rate per base acre = MAX [$0, or 86% times (county benchmark revenue minus observed revenue) times a farm’s PLC base yield times 85% payment reduction factor]. County benchmark revenue = (5-crop year Olympic average (high and low values removed) of recent US market year prices times 5-crop year Olympic average of recent trend-adjusted county yields). Observed revenue = observed US crop year price times observed county yield. ARC-CO payment rate is capped at 10% of county benchmark revenue.
PLC payment rate per base acre = MAX [$0, or (US effective reference price – US market year price) times a farm’s PLC base yield times 85% payment reduction factor].
The federal estate tax exemption is set to drop dramatically in 2026—from $13.99 million in 2025 to an estimated $7–$7.5 million per person. For some farm families, this shift could result in significant estate tax exposure. While most estates won’t exceed the new limit, some farmers, especially those with high-value farmland or appreciating assets, will find themselves suddenly at risk of federal estate taxes.
Gifting is one strategy to reduce the size of your taxable estate, but it’s not always simple or risk-free. Let’s explore when gifting can help, when it might not, and what to watch out for.
Two Types of Gifts
There are two main gifting categories under federal law:
- Annual Exclusion Gifts – In 2025, you can gift up to $19,000 per recipient ($38,000 for couples) annually without using any of your lifetime exemption.
- Lifetime Credit Gifts – Larger gifts are allowed, but they reduce your lifetime estate tax exemption. The lifetime estate tax exemption is the amount of wealth that the IRS exempts from estate taxes. The exemption can be used at death, gifted away during life, or a combination of the two.
Example: If a parent gifts a $1,019,000 farm to a child, the first $19,000 is exempt from taxes and does not reduce the parent’s estate tax exemption. The remaining $1,000,000 reduces the parent’s lifetime estate tax exemption from $13.99 million to $12.99 million.
Gifting Strategies That Work
1. Annual Exclusion Gifts
If you're just slightly over the expected 2026 exemption, annual gifts can move you back under the limit.
Example: A grandparent with 10 grandchildren can gift $190,000 per year. Over 2 years, that’s $380,000—enough to reduce a modest estate and eliminate taxes.
But for high-net-worth individuals, $19,000 per person may be too little to make a significant impact.
2. Lifetime Gifts of Appreciating Assets
Large gifts don’t directly reduce estate tax liability (since they reduce your exemption), but they remove future appreciation from your estate.
Example: If you gift farmland worth $1M that later appreciates to $3M, only $1M is deducted from your estate tax exemption — the $2M in appreciation escapes estate taxation entirely.
Potential Downsides of Gifting
- No Stepped-Up Basis. Gifting assets during life means recipients take your original tax basis, not the stepped-up value at death—potentially increasing future capital gains taxes.
- Loss of Control & Income. You must fully give up ownership and control. Gifting income-producing property could impact your financial security.
- Risk of Financial Mismanagement. If a gifted asset is lost to debt, lawsuits, or divorce, it's gone. One solution? Use an irrevocable trust to hold the gift—this protects assets while still benefiting your heirs.
Another Strategy: Pay Directly for Education & Medical Expenses
The IRS allows unlimited direct payments of tuition or medical bills without using your exemption. But payments must go straight to the provider, not to the individual.
Example: Grandpa has a $9 million estate and wants to reduce its size before the federal estate tax exemption drops in 2026. He has four grandchildren in college and a daughter who recently underwent surgery.
Grandpa pays the following directly:
- $20,000 in tuition for each grandchild (4 x $20,000 = $80,000) directly to their universities
- $25,000 in hospital bills paid directly to the hospital for his daughter
Total Reduction in Taxable Estate: $105,000
Impact on Exemption: None—these payments do not count against Joe’s $13.99 million estate tax exemption or annual gift limit, because they qualify under the IRS educational and medical exclusions. Grandpa could still give each of those recipients an additional $19,000 under the annual gift exclusion without any tax consequences.
Conclusion: Gift With Caution and Professional Help
Gifting can be an effective estate tax strategy—but only when used thoughtfully and with professional guidance. Consider the loss of stepped-up basis, the asset’s appreciation potential, your own financial needs, and the stability of the recipient. For some, the risks of gifting may outweigh the benefits.
With estate tax rules changing in 2026, now is the time to review your estate plan. Consult your attorney and tax advisor to determine if gifting fits your strategy—and how to do it safely.
For more information on gifting and estate taxes, see the Gifting to Reduce Federal Estate Taxes bulletin available at farmoffice.osu.edu.
Tags: estate taxes, Gifting
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On April 9, 2025, Ohio enacted House Bill 106, known as the Pay Stub Protection Act. This bipartisan legislation marks a meaningful step forward in promoting wage transparency and safeguarding worker rights across the state. Prior to this law, Ohio stood out as one of the few states without a mandate for employers to issue pay stubs. With its passage, the Act now ensures employees are provided with comprehensive earnings statements, bringing Ohio in line with the practices of most other states.
What the Law Requires
Under the Pay Stub Protection Act (codified in Ohio Revised Code Section 4113.14), employers are now mandated to provide each employee with a written or electronic pay statement on every regular payday. These statements must include:
- Employee’s name and address;
- Employer’s name;
- Total gross wages earned by the employee during the pay period;
- Total net wages paid to employee for the pay period;
- An itemized list of additions to or deductions from wages paid to the employee, with explanations; and
- The date the employee was paid and the pay period covered by that payment.
For hourly employees, the following three additional items are also required:
- Total hours worked during the pay period;
- Hourly wage rate; and
- Total number of hours worked beyond 40 hours in a workweek.
Enforcement
While the Pay Stub Protection Act brings Ohio in line with the majority of states regarding wage transparency, it differs from some by not granting employees the right to sue or seek monetary compensation for an employer’s noncompliance. If an employee does not receive a pay stub that meets the Act’s requirements, they must first submit a written request to their employer for a compliant pay stub. The employer then has 10 days to provide the required statement.
If the employer fails to respond within that timeframe, the employee may report the violation to the Ohio Department of Commerce. Should the Department find a violation, it will issue a written notice to the employer. The employer is then required to post the notice in a conspicuous location on the premises for a period of 10 days.
Implications for Employers
Although many employers already issue pay stubs as a matter of best practice, Ohio law now makes it a legal requirement. This change presents an opportunity for employers to review their payroll systems and make any necessary updates to ensure compliance. Employers should confirm that their pay statements contain all required information and that any third-party payroll providers are also adhering to the new standards.
A Step Toward Greater Transparency
The Pay Stub Protection Act marks a meaningful step forward for worker rights in Ohio. By requiring detailed pay statements, the law equips employees with the information necessary to confirm their earnings and promotes greater transparency and fairness in the workplace.
For additional details about the Pay Stub Protection Act and its requirements, refer to the official legislative text of House Bill 106 or visit the Ohio Department of Commerce’s website.
Tags: Ohio Law, Pay Stub Protection Act, Agricultural Labor, Ag Labor, Farm Labor
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