USDA this week finalized new farm program payment-limit rules that could mean good news for many family farms and operations organized as LLCs, S corporations and other pass-through entities. Beginning with the 2026 crop year, each equal owner who is actively involved in the farming operation may qualify for their own payment limit, rather than having
The new rule also simplifies things by removing Adjusted Gross Income testing at the entity level. Instead, eligibility and payment limits will be based on the individual owners and whether they are actively engaged in the operation. Another important update is that owners can receive salaries or guaranteed payments for their work without automatically jeopardizing their eligibility for program benefits.
The changes will take effect with the 2026 crop year, so farmers should prepare now. USDA is encouraging farmers to review their ownership and business structure information with their local Farm Service Agency office and make any needed updates by Sept. 15. Taking a little time now could help ensure operations are positioned to take full advantage of the new rules when they kick in next year.
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