The cabinet recently launched a new tax incentive program designed to preserve the state’s farmland and sustain one of its most important industries.
In December, the commonwealth unveiled the Kentucky Selling Farmer Tax Credit (KSFTC) program, which encourages the continued use of agricultural land for farming by crediting farmers who sell their assets to beginning farmers. Eligible selling farmers could receive tax credits up to 5% of the purchase price of qualifying assets, with a $25,000 cap per calendar year and a $100,000 lifetime cap.
“The Kentucky Selling Farmer Tax Credit program is an innovative way to incentivize those farmers who are interested in selling their farmland to sell to new or beginning farmers,” Kentucky Agriculture Commissioner Ryan Quarles said. “The average age of a farmer in Kentucky is about the age of retirement. We need to continue incentivizing agriculture as a career path so that Kentucky can maintain its reputation as a top-notch agricultural state.”
Both the selling and acquiring parties must meet the following criteria for beginning and selling farmers:
Before completing a sale of agricultural assets, applicants should review the Kentucky Selling Farmer Tax Credit Guidelines for more detailed program information and eligibility requirements.
While this program provides tax credits to selling farmers, other state agricultural programs, such as the Kentucky Agricultural Finance Corporation’s Beginning Farmer Loan Program, are available to assist beginning farmers.
Click here for additional information or to download an application.