Home | Contact Us

Governor Corbett Ends Burden for Farmers by Eliminating Inheritance Tax: New law is a victory for Pennsylvania farm families
June 30, 2012, Harrisburg – Landmark legislation signed today by Governor Tom Corbett makes it easier for Pennsylvania farms to transition between generations.

The legislation eliminating the Pennsylvania inheritance tax on farms takes effect immediately and applies only to working farms. Pennsylvania farmers can now pass their farms on to their heirs without worrying they will have to pay steep “death taxes” to keep them in the family.

“The death tax has forced too many families to sell their legacy, their land and their way of life,” said Governor Corbett. “This tax has put too many farms out of business because it was too expensive for farmers to pass them down to their children. This will happen no more. We intend to save our farms.”

Previously when a landowner died, heirs to their farm property had to pay an inheritance tax of 4.5 percent if they were adult children and 12 percent if they were siblings of the deceased.

“The inheritance tax has been a burden on farm families for decades,” said Agriculture Secretary George Greig. “By eliminating this tax, Governor Corbett solidified his commitment to Pennsylvania farm families, and to keeping farmers faming for generations. This law provides farmers the opportunity to save thousands of dollars in inheritance tax, allowing them to reinvest in their agricultural operations.”

PAgrows, the Agriculture Department’s economic development initiative, can help farmers understand farm transition and finances, including state and federal grant and low interest loan programs to grow their operations. Visit www.pagrows.com or call 717-705-9513.

Agriculture is the number one industry in Pennsylvania with more than 63,000 farm families and 7.65 million acres of farmland, generating $5.7 billion in cash receipts. Visit www.agriculture.state.pa.us.

"Know Your Farmer, Know Your Food" Project Launches Website
The U.S. Department of Agriculture launched a new website for the "Know Your Farmer, Know Your Food" initiative.

Ten Things to Know about Farm Income and Deductions 
If you have a farming business, there are several tax issues to consider before filing your federal tax return.  The IRS has compiled a list of 10 things that farmers may want to know.

1. Crop Insurance Proceeds You must include in income any crop insurance proceeds you receive as the result of crop damage. You generally include them in the year you receive them.
2. Sales Caused by Weather Related Condition If you sell more livestock, including poultry, than you normally would in a year because of weather-related conditions, you may be able to postpone reporting the gain from selling the additional animals due to the weather until the next year.
3. Farm Income Averaging  You may be able to average all or some of your current year's farm income by allocating it to the three prior years. This may lower your current year tax if your current year income from farming is high, and your taxable income from one or more of the three prior years was low. This method does not change your prior year tax, it only uses the prior year information to determine your current year tax.
4. Deductible Farm Expenses  The ordinary and necessary costs of operating a farm for profit are deductible business expenses.  An ordinary expense is an expense that is common and accepted in the farming business. A necessary expense is one that is appropriate for the business.
5. Employees and Hired Help  You can deduct reasonable wages paid for labor hired to perform your farming operations. This includes full-time and part-time workers. You must withhold social security, medicare and income taxes on employees.
6. Items Purchased for Resale  You may be able to deduct, in the year of the sale, the cost of items purchased for resale, including livestock and the freight charges for transporting livestock to the farm.
7. Net Operating Losses  If your deductible expenses from operating your farm are more than your other income for the year, you may have a net operating loss. You can carry that loss over to other years and deduct it. You may get a refund of part or all of the income tax you paid for past years, or you may be able to reduce your tax in future years.
8. Repayment of Loans  You cannot deduct the repayment of a loan if the loan proceeds are used for personal expenses. However, if you use the proceeds of the loan for your farming business, you can deduct the interest that you pay on the loan.
9. Fuel and Road Use You may be eligible to claim a credit or refund of federal excise taxes on fuel used on a farm for farming purposes.
10. Farmer's Tax Guide  More information about farm income and deductions is in IRS Publication 225, Farmer's Tax Guide, which is available at http://www.irs.gov/pub/irs-pdf/p225.pdf or by calling the IRS at 800-TAX-FORM (800-829-3676).

MEET THE FUTURE OF WARREN AGRICULTURE
4-H member TARA SLeeMAN
6/1/10 Tara Sleeman of the Scandia Trail Blazers is one of 1,500 Warren County youth who take part in the 4-H programs. A seventh grader at Eisenhower High School and active in 4-H for 6 years, Tara is the daughter of Heather Wilcox. 

In case you’ve forgotten the meaning of the 4-Hs, here is a quote from the 4-H website:

"I Pledge my Head to clearer thinking, my Heart to greater loyalty, my Hands to larger service, and my Health to better living, for my club, my community, my country, and my world." More...

Building Sustainable Farms, Ranches and Communities: Federal Programs for Sustainable Agriculture, Forestry, Entrepreneurship, Conservation and Community Development
Sustainable Agriculture Research and Education (SARE) offers a free on-line guide for anyone seeking help from federal programs to foster innovative enterprises in agriculture and forestry in the United States. Specifically, the guide addresses program resources in community development; sustainable land management; and value-added and diversified agriculture and forestry. Thus, it can help farmers, entrepreneurs, community developers, conservationists, and many other individuals, as well as private and public organizations, both for-profit and not-for-profit.

The guide can also help USDA and other agency employees become aware and take better advantage of the enormous array of federal programs and resources available to their clients in supporting agricultural and forestry innovations. This edition constitutes the guide's fifth printing and third complete update, incorporating programs from the 2008 Farm Bill.  Visit: http://www.sare.org/publications/ruralplaces.htm to access this guide and links to other resources

Farms and mosquito control
Ponds and natural pools that livestock drink from may become serious mosquito-breeding areas. Animal waste adds nutrients to the water that benefit mosquitoes, and hoof prints create puddles where mosquitoes may be isolated from predators. If feasible, fence animals out of ponds and create a single access area. This keeps the animals from trampling the entire edge, although if too much room is left between the pond and fence, animals may still create ruts. Paving the access point can reduce puddles, but be sure to provide good footing for the animals. Weed control reduces hiding places for mosquitoes. It may be necessary to treat these ponds regularly with a biological larvicide or to introduce insect-eating fish if they are not already present. However, do not introduce fish unless the pond is man-made and isolated from natural waters.

Troughs and other containers that provide water for animals can easily become a source of mosquitoes. The ground surface around the troughs often becomes roughened by animal hooves, producing hundreds of small water pockets. Permanently correct this potential source of mosquitoes by providing drainage or paving the area. Temporary improvement can be had by flushing out the water every week if drainage outside the trough area is good, or by treating the water with a biological larvicide. Do not add chemical insecticide to water that livestock may drink. Clean cattle tanks and watering troughs regularly to prevent mosquitoes from multiplying.

Links on the WarrenAg website

Web Links of Interest to Farmers

PENN STATE Websites