Minnesota Lawmakers Boost a Tax Credit That Helps Young Farmers

In January, money for a tax credit aimed at helping newer farmers ran out in one day. Around 300 farmers were turned away.

However, lawmakers decided to remove the cap on funds for the remainder of 2026, so those farmers and more will be eligible for thousands of dollars in tax credits.

Minnesota’s farmers are aging, and in order for the industry to stay healthy, the next generation of farmers needs to get in the game.

But farming is an expensive, capital-heavy business to get into, even for those who grew up on farms themselves. Land, in particular, is difficult for new farmers to access. Farming families hold on to tillable acres for generations and when land does go on the market, it's expensive.

In 2017, the Minnesota Legislature created the Beginning Farmer Tax Credit to incentivize established farmers to rent or sell equipment, livestock and land to beginning farmers. Beginning farmers are defined as the roughly 25 percent of Minnesota farmers who have been farming for 10 years or fewer.

“I have always tried to pitch it to landlords and people I'm buying land from,” said Zach VonRuden. He grows corn and soybeans and raises steers in southeastern Minnesota.

A younger farmer like VonRuden and an established farmer negotiate a deal, then they apply for the credit together. Then, the established farmer collects the tax credit: up to $7,000 for cash rentals, $10,000 for share rentals and $50,000 for sales.

The program also requires beginning farmers to work with a farm business management instructor and provides an educational tax credit of up to $1,500 for three years to help pay for that.

“I think it gives younger operators a little more opportunity to be a little more competitive in a very competitive land market,” VonRuden said.