Farm Progress

FSA disaster payments exempt from state income tax

Certain Farm Service Agency disaster payments are now exempt from state income taxes.

Mindy Ward

January 3, 2017

1 Min Read
EXEMPT INCOME: Farmers and ranchers who received disaster or emergency payments may find that income exempt from state income taxes, according to the Missouri Farm Service Agency. Agricultural producers should visit with a tax preparer to see just what impact this could have this year's taxes.

Did you receive a disaster payment last year? A new law makes these types of payments exempt from state income tax for Missouri farmers and ranchers.

In September 2016, the Missouri Legislature passed Senate Bill 641. According to the Missouri Farm Service Agency, the bill states any income received as payment from a program compensating agricultural producers from a loss due to a disaster or emergency can be subtracted from the producers’ federal adjusted gross income, as it relates to Missouri state income tax only. This provision is for all tax years beginning on or after Jan. 1, 2014.

This adjustment to the state tax code applies to the following USDA programs:

• Livestock Forage Disaster Program (LFP)
• Livestock Indemnity Program (LIP)
• Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish (ELAP)
• Emergency Conservation Program (ECP)
• Noninsured Crop Disaster Assistance Program (NAP)
• Pasture, Rangeland, Forage Pilot Insurance Program
• Annual Forage Pilot Program
• Livestock Risk Protection Insurance Plan
• Livestock Gross Margin Insurance Plan

Missouri FSA recommends farmers and ranchers consult with a tax preparer for information on how this may affect their operation. Agricultural producers can also contact their local FSA county office for assistance with payment history information.

About the Author(s)

Mindy Ward

Editor, Missouri Ruralist

Mindy resides on a small farm just outside of Holstein, Mo, about 80 miles southwest of St. Louis.

After graduating from the University of Missouri-Columbia with a bachelor’s degree in agricultural journalism, she worked briefly at a public relations firm in Kansas City. Her husband’s career led the couple north to Minnesota.

There, she reported on large-scale production of corn, soybeans, sugar beets, and dairy, as well as, biofuels for The Land. After 10 years, the couple returned to Missouri and she began covering agriculture in the Show-Me State.

“In all my 15 years of writing about agriculture, I have found some of the most progressive thinkers are farmers,” she says. “They are constantly searching for ways to do more with less, improve their land and leave their legacy to the next generation.”

Mindy and her husband, Stacy, together with their daughters, Elisa and Cassidy, operate Showtime Farms in southern Warren County. The family spends a great deal of time caring for and showing Dorset, Oxford and crossbred sheep.

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