By Yangxuan Liu
The One Big Beautiful Bill Act (OBBBA) changes how U.S. Department of Agriculture (USDA) payment limitations apply to different farm business structures. On June 2, 2026, USDA released the final rule (link) explaining how this provision will be administered beginning with the 2026 program year.
Prior to passage of OBBBA, business structure affected the number of payment limitations an operation could receive. General partnerships and joint ventures were permitted to multiply the applicable payment limitation by the number of eligible partners. In contrast, a Limited Liability Company (LLC) or S corporation was generally treated as a single legal entity—and limited to a single payment limitation—regardless of the number of members actively engaged in the farming operation. As a result, many producers organized as general partnerships to preserve eligibility for multiple USDA payments, despite the additional personal liability associated with that business structure. This disparate treatment of entities was highlighted in a previous Southern Ag Today article (link) by Ferrell, Lashmet, and Fischer (2024).
To address this imbalance, OBBBA established the Qualified Pass-Through (QPT) Entity classification (Table 1). Eligible QPT entities include Partnerships, Joint ventures, S corporations, and LLCs that are not taxed as C corporations. Beginning with the 2026 program year, QPT entitiesmay qualify for USDA payment limitations based on the number of eligible members, provided each member satisfies USDA eligibility requirements, including the actively engaged in farming provisions. Now, Qualified Pass-Through LLCs and S corporations are treated similarly to general partnerships and joint ventures for USDA payment limitation purposes.
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