If you farm in Pennsylvania and plan on buying a new no-till planter or want to install a new manure storage for your dairy farm, make sure to apply for a REAP (Resource Enhancement and Protection Program) tax credit.
The REAP application period was recently announced and $10 million in tax credits are available on a first-come, first-served basis.
REAP is a tax credit program for agricultural producers who implement best management practices or purchase equipment that reduces nutrient and sediment runoff, enhancing soil and improving the quality of Pennsylvania’s waterways. This is the 14th year of the program.
Farmers may receive up to $250,000 in any seven-year period, and spouses filing jointly can use REAP tax credits.
The most common projects used for REAP are the purchase of no-till planting and precision ag equipment, waste storage facilities, the writing of conservation plans and nutrient management plans, and protecting animal heavy-use areas like barnyards. Cover crops and riparian stream buffers are also common REAP-eligible practices.
Farmers may receive REAP tax credits of 50% to 75% of the project’s eligible out-of-pocket cost. Farmers whose operation is in a watershed with an EPA-mandated Total Maximum Daily Load (TMDL) can receive REAP tax credits of 90% of out-of-pocket costs for some projects.
A key point is that REAP tax credits can be used in conjunction with other funding sources such as the Environmental Quality Incentive Program (EQIP), the Chesapeake Bay Program or Conservation Excellence Grants to help install BMPs.
Baseline eligibility includes compliance with the PA Clean Streams Law and the Pennsylvania Nutrient and Odor Management Law.
To be eligible, producers must have a current and up-to-date conservation plan, or agricultural erosion and sedimentation plan on all acres as well as a nutrient management plan or manure management plans for farms that have animals or spread manure.
The written plans must be on-schedule for full implementation in order to be considered “current.” The cost of developing and implementing these plans may be included to qualify for the tax credit.
REAP differs from traditional conservation programs in that the tax credits are issued after the installation of a practice or purchase of eligible equipment.
Private investors may act as project sponsors by providing capital in exchange for tax credits. Any individual or business subject to taxation by Pennsylvania through personal income tax, corporate net income tax, the bank shares tax or others are eligible to participate in REAP.
Since the program began in 2007, REAP has awarded tax credits to more than 5,500 projects totaling over $100 million. Private investments in REAP have also contributed to the conservation projects, which in total are worth nearly $250 million.
More information about REAP, including the 2020-21 application packet and program guidelines, is available at agriculture.pa.gov.Source: Pennsylvania Department of Agriculture, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.