Recent Blog Posts
By Clint Schroeder, Program Manager for Ohio Farm Business Analysis Program and Eric Richer, Field Specialist, Farm Management
With the projected price discovery period now closed for winter wheat Ohio farmers have until September 30, 2025, to select the crop insurance coverage that best suits their operation. However, the decision on policy type and coverage levels for 2026 crops could be impacted by the passage of the One Big Beautiful Bill Act (OBBBA). Signed into law on July 4, 2025, OBBBA offers higher area-based policy coverage levels, increases premium support, and expands support for beginning farmers and ranchers. This article will highlight these key changes so that producers can make more informed decisions for 2026 production on their farm.
Previously, producers that wanted to purchase Supplemental Coverage Option (SCO) as part of their policy were required to enroll those base acres in the Price Loss Coverage (PLC) program. The OBBBA has decoupled SCO from the traditional Farm Bill decision allowing farmers to enroll in either the Agriculture Risk Coverage (ARC) or PLC program. Additionally, premium support, the subsidy for SCO has increased from 65% to 80%. In 2027 SCO coverage will also increase to 90%, up from the current 86% revenue benchmark. This band of coverage is currently available in the form of the Enhanced Coverage Option (ECO). ECO is currently available at two coverage levels, 86% to 90% and 90% to 95%. The premium support for these policies also increased to 80%. It is important to note that SCO and ECO provide coverage above the individuals’ underlying Multi-Peril Crop Insurance (MPCI) policy but are based off of the county’s production for that year. That is to say, SCO and ECO do not provide additional protection at the unit level for each farm, field and crop.
Premium support across all Basic and Optional Units was also increased by 3 to 5 percentage points. While OBBBA did not specifically raise the premium support for Enterprise Units, the increased subsidy for Basic and Optional Units affects the calculation the Risk Management Agency (RMA) uses to set premium support levels for Enterprise Units. Table 1 outlines the premium support for each coverage level under prior legislation compared to current support under the OBBBA.
|
Table 1: Premium Subsidy Rates: Prior Legislation vs OBBBA |
||||
|
|
Prior Legislation |
OBBBA |
||
|
Coverage Level |
Basic and Optional Units |
Enterprise Units |
Basic and Optional Units |
Enterprise Units |
|
50% |
67% |
80% |
67% |
80% |
|
55% |
64% |
80% |
69% |
80% |
|
60% |
64% |
80% |
69% |
80% |
|
65% |
59% |
80% |
64% |
80% |
|
70% |
59% |
80% |
64% |
80% |
|
75% |
55% |
77% |
60% |
80% |
|
80% |
48% |
68% |
51% |
71% |
|
85% |
38% |
53% |
41% |
56% |
Beginning farmers will also receive an increased subsidy that is tiered based on their years of farming. A Beginning Farmer or Rancher (BFR) is now defined as an individual who has not actively operated and managed a farm or ranch in any state, with an insurable interest in a crop or livestock as an owner-operator, landlord, tenant, or sharecropper for more than 10 crop years. Under prior legislation BFRs received premium support of 10%. The OBBBA increases the subsidy amount to 15% for the first two years, 13% in year three, and 11% in year four. Years 5 through 10 will remain at the 10% additional premium support level.
Implications
The 2026 projected winter wheat price for Ohio is now set at $5.76 per bushel, down from $6.06 per bushel in 2025. The volatility factor for 2025 was .23 and decreased slightly to .20 in 2026. The 2026 MPCI wheat policies will use this price and volatility factor to determine producer premiums. SCO and/or ECO area-based policies can then be added as options, if desired. The corn and soybean projected prices will be determined from February 1-28, 2026 with an insurance signup deadline of March 15. Farmers should consult with their crop insurance agent to receive a quote tailored to their crop, county, unit structure, and approved yield. In some instances, reducing individual coverage and purchasing SCO or ECO may provide additional risk protection at a lower cost.
References
Join us on Friday, September 12 at 10:00 a.m. for an informative webinar on the H-2A program. We will focus on how traditional farming operations can use H-2A to supplement their labor needs. While H-2A is commonly used by labor-intensive operations such as fruit, vegetable, and nurseries, it can also be a valuable option for grain and livestock operations.
During the webinar, we will cover the current state of agricultural labor in Ohio and the United States, how H-2A can address labor shortages for traditional farming operations, and the requirements of the program. Our panel of experts will include:
- Margaret Jodlowski, Assistant Professor, Agricultural, Environmental, and Development Economics, The Ohio State University
- Jeff Lewis, Attorney, OSU Agricultural and Resource Law Program
- Robert Moore, Attorney, OSU Agricultural and Resource Law Program
- Representative from the U.S. Department of Labor
Free registration is available here: https://osu.zoom.us/webinar/register/WN__s5bd8oKQ3K0vLiTYuqSug
For more information, contact Robert Moore at moore.301@osu.edu
.
Ohio isn't officially a "Mid-Atlantic" state, but we're pleased to be part of the Mid-Atlantic Ag & Resource Law Conference on October 28 and 29 at the National Conservation Training Center in Shepherdstown, West Virginia. The OSU Agricultural & Resource Law Program is partnering with the West Virginia College of Law, University of Maryland, North Carolina State University, Penn State University and Virginia Tech to host the event, which focuses on property and land use laws affecting agriculture.
The conference offers 7 hours of Continuing Legal Education for attorneys and kicks off the evening of October 28 with a reception, dinner, and a review of hot agricultural law issues in the region by:
Andrew Branan, Associate Extension Professor, NC State University
Jen Friedel, Associate Professor of Practice, Virginia Tech
Paul Goeringer, Extension Legal Specialist, University of Maryland
Peggy Kirk Hall, Director, Ohio State University Agricultural & Resource Law Program
Jesse Richardson, Professor of Law, West Virginia University College of Law
Audry Thompson, Staff Attorney, Penn State Center Agricultural and Shale Law
Sessions on October 29 include:
Land Use Challenges and Opportunities for Ag
Kyla Kaplan, Olsson Frank Weeda, Terman Matz PC and Justin Benevidez, Texas A&M, AgriLife Extension Economist
From Prime Farmland to the Grid: Siting Solar in Virginia and West Virginia
Matt Gooch, ReisingerGooch
Legal Strategies for Addressing Risks of Losing Family Farmland
Robert Moore, Attorney, Ohio State University Agricultural & Resource Law Program
Conservation Easements
Lauren Pregmon, Pregmon Law Offices
How to Handle a Zoning Hearing
Tony Gorski, Law Office of Anthony G Gorski, LLC
The final session on Ethical Use of GenAI for Lawyers by Amy Cyphert, Associate Professor, West Virginia University College of Law will wrap up the conference and provide 1 hour of ethics credit.
In addition to providing relevant legal information, the conference is a great deal. Early bird registration, available until September 11, 2025, is $115 if staying at the conference site and $140 if not staying at the conference site. After September 11, 2025, the registration fee is $225 if staying at the conference site and $250 if not staying at the conference site. A $50 registration fee is available at any time for students.
Register by September 11 for the early bird rate and to guarantee lodging at the National Conservation Training Center. Register on the conference registration site.
Tags: law conference, Agricultural Law, CLE, mid-atlantic ag and resource law
Comments: 0
The One Big Beautiful Bill (HB 1) has received both praise and criticism from many commentators. However, one change that is clearly positive for farms is the provision allowing LLCs, corporations, and other liability-limiting entities to be eligible for multiple payments. This eliminates the need for some farms to choose between multiple FSA payments and unnecessary liability exposure.
Under the old rules, which remained in place through previous Farm Bills, LLCs and corporations were treated as a single "person" for FSA payment limitation purposes. This meant they were capped at one annual payment limit, historically $125,000 for programs such as Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC), regardless of the number of owners or shareholders involved. To access multiple payment limitations, many farms had to operate as general partnerships, which increased exposure to personal liability.
In contrast, the new rules introduced by HB 1 treat LLCs and S corporations as pass-through entities, similar to partnerships. This allows each actively engaged member or shareholder to qualify for a separate payment limit, now inflation-adjusted to a base of $155,000 per person or entity.
An Example
The Jones family has five members actively involved in their farming operation. They farm a large number of acres and their FSA payments often exceed one payment limitation. To ensure eligibility for multiple payments, they operated as a general partnership. However, Ohio law holds each partner personally liable for the actions of the partnership. The Jones’ accepted the additional liability exposure in order to have the opportunity to capture multiple FSA payments.
Under HB 1, the Jones family can now establish an LLC for their operation. Assuming each family member is actively engaged in farming, the LLC will be eligible for up to five payment limitations. Additionally, the LLC will provide liability protection for the owners.
Safeguards Against Abuse
Importantly, these changes do not create loopholes for fraud or misuse of federal funds. The core requirement remains unchanged: each individual claiming a separate payment limit must be "actively engaged in farming," meaning they must provide contributions of labor or management and capital in proportion to their share of the operation.
FSA enforces this through detailed documentation, which tracks entity details, ownership attribution, and compliance with adjusted gross income (AGI) caps. Payments are attributed proportionally based on ownership levels to prevent exceeding limits, and the agency retains authority to audit and review operations to ensure genuine farming activity. These safeguards protect taxpayer dollars while offering flexibility to legitimate farm businesses.
Converting Partnerships to LLCs
For farmers currently operating as partnerships, this is an opportune time to consider converting to an LLC to take advantage of the new rules. The process in Ohio is relatively straightforward. File a Certificate of Conversion with the Ohio Secretary of State, which typically costs $99 and can be submitted online or by mail. Include details such as the entity's original name, the new LLC name, and the effective date of conversion. Once approved, often within a few business days, update your FSA records and other registrations. This process preserves continuity while adding liability protection, making it a practical upgrade for many Ohio farms. Be sure to consult with your attorney before making the change.
The Legal Shift
In the legal world, there has historically been only one main reason for a farmer, or any other business owner, to operate as a partnership instead of an LLC. That reason was to capture multiple FSA payments. The recent change in HB 1 now allows farmers to operate as LLCs and avoid unnecessary liability exposure or overly complex business structures.
Governor DeWine signed H.B. 96, the two-year state operating budget, into law on June 30. Over the last few months, we have reported on provisions in the biennial budget related to agriculture. In this week’s installment, we will examine the changes the bill makes to what is permissible in the practice of veterinary medicine in the state of Ohio.
In the beginning of June, we reported on S.B. 60, which would allow veterinarians to practice telehealth in Ohio. You can find our previous post here. Instead of being passed as a stand-alone bill, the provisions about veterinary telehealth were included in the state operating budget, H.B. 96. Looking broadly at the provisions included in H.B. 96, there are four main changes to veterinary law. The language in the budget bill:
- Allows the use of veterinary telehealth services;
- Allows a veterinary-client-patient relationship (VCPR) to be established via a telehealth visit in some cases;
- Creates special requirements for the use of telehealth services for livestock animals; and
- Allows veterinarians to prescribe medication via telehealth visit with certain exceptions.
Telehealth services for veterinary care permitted
During the Covid-19 pandemic and in the years following, most of us have become familiar with visiting our doctors via telehealth appointments using a computer or smartphone. H.B. 96 allows this appointment method to also be used in veterinary care in the state of Ohio.
Under the budget bill, a licensed veterinarian may conduct the practice of veterinary medicine via telehealth services if all the following apply:
- The veterinarian obtains the informed consent from the client, including an acknowledgement that the standards of care required by Ohio law equally apply to in-person and telehealth visits. The veterinarian shall maintain documentation of the consent for at least three years after receiving the informed consent.
- The veterinarian provides the client with the veterinarian's name and contact information and secures an alternate means of contacting the client if the telehealth visit is interrupted. Following the telehealth visit, the veterinarian shall make available to the client an electronic or written record of the visit. The electronic or written record shall include the veterinarian's license number.
- Before conducting an evaluation of a patient via a telehealth visit, the veterinarian advises the client of all the following:
- The veterinarian may ultimately recommend an in-person visit with the veterinarian or another licensed veterinarian;
- The veterinarian is prohibited under federal law from prescribing certain drugs or medications based only on a telehealth visit;
- The appointment for a telehealth visit may be terminated at any time.
- A licensed veterinarian may prescribe drugs or medications after establishing a veterinary-client patient relationship via telehealth services within certain parameters and with certain exceptions (see the “Prescribing medication via telehealth visit” heading below).
Once the veterinarian shares all of this information with their client, and if the rules for prescribing drugs are followed, a telehealth veterinary visit is legally permitted in the state of Ohio under the language of H.B. 96.
Changes to veterinary-client-patient relationships
Much like a doctor-patient relationship takes place between a doctor and a person who is their patient, a veterinary-client-patient relationship takes place between a veterinarian, their client (the animal’s owner), and the patient (the animal). According to Ohio law, a VCPR relationship exists when the following conditions have been met:
- A veterinarian assumes responsibility for making clinical judgments regarding the health of a patient and the need for medical treatment, medical services, or both for the patient, and the client has agreed to follow the veterinarian's instructions regarding the patient.
- The veterinarian has sufficient knowledge of the patient to initiate at least a general or preliminary diagnosis of the medical condition of the patient. In order to demonstrate that the veterinarian has sufficient knowledge, the veterinarian must have seen the patient recently, and must be personally acquainted with the keeping and care of the patient by doing any of the following:
- Making medically appropriate and timely visits to the premises where the patient is kept;
- Examining the patient in person; or
- Under the new provisions of H.B. 96, by examining the patient in real time via telehealth.
- The veterinarian is readily available for a follow-up evaluation, or has arranged for emergency coverage, in the event the patient suffers adverse reactions to the treatment regimen, or the treatment regimen fails.
H.B. 96 keeps previous Ohio law concerning the establishment of a VCPR intact, but it also broadens the law by allowing for “sufficient knowledge” of a patient to be gained by a telehealth examination. However, as we will discuss below, this is not the case when it comes to livestock animals.
Telehealth for livestock
Up until now, we have discussed requirements for veterinary telehealth broadly. When a telehealth visit includes a client who raises livestock for human food consumption, the new language is a bit more strict. In the case of livestock, a VCPR must be established in person prior to the use of telehealth services. While a VCPR for non-livestock animals may be established via a telehealth appointment, VCPRs involving livestock must first include that in-person meeting. This means that a veterinarian may not treat or diagnose an injury or illness in a livestock animal using telehealth if the veterinarian has not previously established an in-person VCPR with the patient and client. Once an in-person VCPR is established with respect to the livestock, the veterinarian may subsequently treat the livestock via telehealth appointment.
That being said, the language in H.B. 96 allows veterinarian may give tele-advice to a client raising livestock prior to establishing a VCPR in person. Tele-advice means a veterinarian giving “health information, opinion, or guidance that is not intended to diagnose, treat, issue certificates of veterinary inspection, or issue prognoses of the physical or behavioral illness or injury of an animal.” According to the American Veterinary Medical Association, tele-advice can consist of broad recommendations via phone, text, or internet. Examples include recommendations that animals receive annual wellness checks, or that animals should receive preventive medicine to prevent worms or other pests. Under the new language, a veterinarian may give these kinds of general tele-advice regarding livestock, but they may not specifically treat or diagnose a livestock animal using telehealth without first establishing a VCPR in-person.
Prescribing medication via telehealth visit
Is a veterinarian permitted to prescribe medication for an animal via a telehealth visit under the new language? The answer is yes, but certain rules apply. After a VCPR relationship is established, a veterinarian may issue a prescription lasting up to fourteen days for the patient via tele-health visit. The veterinarian may additionally issue one refill of the medication for up to fourteen days if another tele-health visit with the patient and client occurs. However, for additional refills, the veterinarian must see the patient in person. Remember that for livestock animals, the VCPR must be established in person before a veterinarian may prescribe drugs. Further, a veterinarian may not prescribe a controlled substance (see the list of controlled substances in section 3719.01 of the Ohio Revised Code) to a patient unless a physical examination takes place in person.
With the passage of this language in H.B. 96, Ohio becomes the eighth state to allow the practice of veterinary medicine via telehealth. Other states include Arizona, California, Florida, Idaho, New Jersey, Vermont, and Virginia. Proponents of the language cite that it will make veterinary care more accessible in the state, and that it will lessen the stress caused to animals by transporting them to and from a vet’s office H.B. 96 becomes effective on September 30, 2025. To read the budget bill in its entirety, click here.
Tags: Ohio legislation, legislation, Animals, livestock, veterinary telehealth, veterinarians
Comments: 0
September 1 is fast approaching, and it’s an especially important date for landowners who lease cropland under an existing lease that does not address when or how the lease terminates. In those situations, September 1 is the deadline established by Ohio law for a landowner to notify a tenant that the landowner wants to terminate the lease. If the landowner does not provide notice by September 1, the tenant operator has a legal argument that the lease continues for another lease term because it was not terminated by the deadline.
Here are a few important provisions about the statutory termination law that are important to understand:
- The September 1 termination date applies only to leases that do not address when or how the lease ends--such as a verbal lease or a written lease that lacks ending date or termination provisions. If a crop lease does include a termination date or a deadline for giving notice of termination, the statutory termination date law does not affect or change those agreed upon terms.
- The September 1 termination date applies only applies to crop leases. It does not apply to leases for pasture, timber, farm buildings, horticultural buildings, or leases solely for equipment.
- To meet the law's requirements, a landowner must give the notice of termination in writing and deliver it to the tenant operator by hand, mail, fax, or email on or before September 1. While the law does not specify what the termination must say, we recommend including the date of the notice, the identity of the lease property being terminated, and the date the lease terminates. The statutory termination law states that the date of termination will be the earlier of the end of harvest or December 31, unless the parties agree otherwise.
- Tenant operators of leased land are not subject to the September 1 termination deadline—the law applies only to the landowner. Even so, it’s important for tenant operators to understand the new law because the law intends to protect a tenant if a landowner attempts to terminate a lease after September 1. In those instances, the law gives the tenant a legal argument that the lease should continue for another term because the termination notice was provided past the statutory termination deadline.
Put leases in writing to avoid the statutory termination law. This law illustrates the importance of having a written farm lease that includes termination and renewal provisions. The parties can agree in advance when the lease terminates or renews as well as how and when to provide notice of termination or renewal of the lease. Clearly written and detailed terms provide certainty for both parties and reduce the risk of lost inputs, lost rents and profits, and litigation due to a “late” termination. For resources on written farm leases, visit aglease101.org and refer to our farmland leasing resources in our ag law library.
Read more about the statutory termination law in our law bulletin and refer to Ohio's “termination of agricultural leases” law in Section 5301.71 of the Ohio Revised Code.
Tags: leases; farm leases; verbal leases; statutory termination; september 1
Comments: 0
by: Carl Zulauf, Seungki Lee, and David Marrison, Ohio State University, August 2025
2024 crop year payments for corn and soybeans are estimated for ARC-CO (Agriculture Risk Coverage – County version) using August 2025 estimates of 2024 crop year prices from USDA, FSA (US Department of Agriculture, Farm Service Agency) (https://www.fsa.usda.gov/resources/programs/arc-plc/program-data) and estimates of county yields from USDA, RMA (Risk Management Agency) (https://webapp.rma.usda.gov/apps/RIRS/SCOYieldsRevenuesPaymentIndicators.aspx). Legislation requires FSA to give primacy to RMA yields when determining ARC-CO payment, but FSA can also consider other factors when determining ARC-CO county yields.
Our next report will be the final FSA payment rates for 2024 crop year corn and soybeans. They are expected to be released in October 2025. They could differ notably from these estimates. Crop year prices and county yields are not final. Moreover, they currently in a range where small changes can cause large changes in ARC-CO payments. Use these estimated payments with caution.
August 2025 Estimates of 2024 Crop Year Payments:
- ARC-CO: Corn and soybean payments are expected for some Ohio counties. ARC-CO is a revenue program and thus includes yield and price (see two sections below). 2024 Ohio weather was highly variable. County yields were thus variable, making payments variable. Estimates of payment per base acre vary from $0 (42 counties) to $81 (Ross) for corn base and from $0 (18 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 base acre. They illustrate that ARC-CO payments are countercyclical to low market revenue. Higher revenue/yields are almost always preferred to an ARC-CO payment. Note, some counties have irrigated and non-irrigated base acres. Payment estimates are for non-irrigated base since dryland production is far more common in Ohio. ARC-CO payments for wheat are now final, although they will not be made until October. Only three counties will receive ACR-CO payments per base acre of wheat: Adams ($4.00), Lorain ($13.60), and Scioto ($29.50).
- PLC: No PLC payment is expected for corn and soybeans. Projected US crop year price exceeds the effective reference price: corn ($4.30 vs. $4.01); soybeans ($10.00 vs. $9.26). Announced wheat payment rate is zero: crop year price ($5.52) exceeds effective reference price ($5.50).
Commodity Program Policy Objective:
- ARC-CO provides assistance if a crop’s county market revenue (yield times price) 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 determined according to the farm bill.
- 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 crop 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 crop year price) ● FSA farm’s PLC base yield ● 85% payment factor.
The labor needs of Ohio farms continue to evolve, and many producers are exploring new options to meet workforce demands. One of those options is the H-2A temporary agricultural worker program, which allows farms to hire seasonal labor from outside the United States.
The H-2A program is commonly used by labor-intensive farms such as fruit, vegetable, and nursery operations. However, it can also be an effective option for traditional row crop and livestock operations. This webinar will explain how the H-2A program works and discuss how it may be a good fit for row crop and livestock producers. The webinar will be hosted by OSU Extension Farm Office and the OSU Department of Agricultural, Environmental, and Development Economics.
The online webinar will be held on Friday, September 12 at 10:00 am. Free registration is available here: https://osu.zoom.us/webinar/register/WN__s5bd8oKQ3K0vLiTYuqSug
What You’ll Learn
This educational session will provide an overview of the current state of agricultural labor and explain the key aspects of the H-2A program, including:
- What the H-2A program is and how it operates
- Practical steps for farms interested in applying
- The application process
- Why H-2A may be useful for farms that have not traditionally used guest workers
Featured Speakers
The webinar will feature a panel of experts, including:
- Margaret Jodlowski, Assistant Professor, Agricultural, Environmental, and Development Economics, The Ohio State University
- Jeff Lewis, Attorney, OSU Agricultural and Resource Law Program
- Robert Moore, Attorney, OSU Agricultural and Resource Law Program
- Representative from the U.S. Department of Labor
Together, they will share insights into how H-2A functions and answer questions about its potential role in Ohio’s farm workforce.
For more information or questions, contact Robert Moore (moore.301@osu.edu).
Tags:
Comments: 0
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 the Farm Office Live webinars. To register, visit go.osu.edu/register4fol.
Tags: farm leases, farmland leasing, farmland leasing update, Webinar, farmland leasing webinar
Comments: 0
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