Farmland Preservation Credit
- I'm buying some property. How can I find out if farmland preservation credit was claimed on it?
- Currently, my farmland is subject to a farmland preservation agreement. I'm wondering if I can get my farmland out of the agreement and, if so, how much farmland preservation credit do I have to pay back?
- I'm doing my taxes and I know I have to include the amount of farmland credit I received last year in taxable income. How can I find out how much farmland credit I received?
- I received a letter saying you need copies of my real estate tax bills. Aren't they attached to my return?
- I'm contemplating having some of my farmland rezoned to something other than exclusive agricultural zoning. How much credit must be paid back?
- What's the difference between an executed and an unexecuted farmland preservation agreement?
- I rent out my farmland. How do I determine if my farmland meets the gross profits requirement?
- I bought some farmland several years ago and wasn't aware of the farmland preservation credit program. Can I go back to past years and amend my tax returns to claim this credit?
- I sold some property during the year. Can I claim the real estate taxes on those parcels for farmland preservation credit purposes?
- What's the difference between farmland preservation credit and farmland tax relief credit?
- I'm buying some property. How can I find out if farmland preservation credit was claimed on it?
Unfortunately, we cannot provide that information to anyone but the person who claimed the credit. You must contact the property owner to obtain the information.
- Currently, my farmland is subject to a farmland preservation agreement. I'm wondering if I can get my farmland out of the agreement and, if so, how much farmland preservation credit do I have to pay back?
The payback portion of the program is handled by the Department of Agriculture, Trade, and Consumer Protection (DATCP). Contact DATCP at (608) 224-4633. DATCP will inform you whether the farmland can be taken out of the program. DATCP will send you the necessary forms to complete.
- I'm doing my taxes and I know I have to include the amount of farmland credit I received last year in taxable income. How can I find out how much farmland credit I received?
Forms I-925 are not being mailed. You should review all tax returns filed during the previous year, including any late and amended returns, and any adjustment notices you received from the department to determine how much farmland preservation credit (FPC) and farmland tax relief credit (FTRC) was received. If you need this information, you must write to the Department of Revenue, P.O. Box 8906, Madison, WI 53708-8906. This information cannot be furnished over the telephone, by e-mail, or by fax.
- I received a letter saying you need copies of my real estate tax bills. Aren't they attached to my return?
When we request copies of the tax bills, it is for one of the following reasons:
- No real estate tax bills were attached;
- Copies of tax bills for the wrong years were attached;
- Copies of the tax receipts instead of the actual tax bills were attached;
- Copies of the tax bills were incomplete; or
- Copies of the tax bills were illegible.
We need copies of the actual real estate tax bills because they are the only documents that provide all of the necessary information, such as the year, name, whether there are any unpaid prior year taxes, whether there are any improvements on the parcel, and the assessed values. Tax receipts provide some, but not all, of this information.
Often, the tax bills attached are for the taxes the claimant paid during the claim year, not the taxes levied during the year. While a cash-basis claimant may deduct the taxes paid during the year as an expense on federal Schedule E or F, claimants must use the taxes levied during the claim year for farmland preservation credit purposes or farmland tax relief credit purposes.
The tax bills that are submitted need to be complete copies. If parts of the parcel numbers or legal descriptions are cut off, we may not be able to determine if those parcels are subject to farmland preservation credit. If photocopies are too light to read or are blurry, we have the same problem.
- I'm contemplating having some of my farmland rezoned to something other than exclusive agricultural zoning. How much credit must be paid back?
The payback portion of the program is handled by the Department of Agriculture, Trade, and Consumer Protection (DATCP). You may contact them at (608) 224-4633.
- What's the difference between an executed and an unexecuted farmland preservation agreement?
An executed agreement has all information in the box on the front of the agreement, as well as the first paragraph blanks, completed by staff from the Department of Agriculture, Trade, and Consumer Protection. The back of the agreement is also signed by them in two different areas. An unexecuted agreement is blank in some of these areas. A copy of the executed agreement must be attached to the claim or on file at the Department of Revenue.
- I rent out my farmland. How do I determine if my farmland meets the gross profits requirement?
You should contact the renter to find out what crops are being produced on your farmland and what happens to those crops. If the crops are sold outright, you would use those amounts to determine whether the gross profit requirement was met.
If the crops being produced on your farmland are fed to cattle which in turn produced milk that was sold, the renter should compute a ratio to prorate the milk receipts. The numerator of the ratio is the amount of crops produced on your farmland which was fed to those cattle, and the denominator is the total amount of crops fed to those cattle. Multiply the milk receipts by this ratio to arrive at an approximate amount of profits considered produced on your farmland.
- I bought some farmland several years ago and wasn't aware of the farmland preservation credit program. Can I go back to past years and amend my tax returns to claim this credit?
Possibly. If the farmland is already subject to a farmland preservation agreement, you must know the effective date of that agreement. In order to claim farmland preservation credit (FPC), the agreement must have been in effect on July 1 of the claim year. If there is no farmland preservation agreement in effect, no credit for past years can be allowed.
For farmland subject to exclusive agricultural zoning, you must have had a soil and water conservation plan on file with the county conservation office and been following that plan for those years. With either document, you must also have met all other FPC requirements for each applicable claim year. The FPC claims must be filed not later than 4 years after the unextended due date of that year's income tax return. For example, for calendar year filers, the 2008 Schedule FC must be filed by April 15, 2013.
- I sold some property during the year. Can I claim the real estate taxes on those parcels for farmland preservation credit purposes?
If the farmland is subject to a zoning certificate, you may claim that portion of the taxes allocated to you on the closing statement, provided those parcels are still zoned for exclusive agricultural use at the end of your claim year and they are on your zoning certificate, and you met all requirements for farmland preservation credit (FPC) purposes. If the farmland is subject to a farmland preservation agreement, you may claim that portion of the taxes allocated to you on the closing statement, provided you met all other FPC requirements.
What's the difference between farmland preservation credit and farmland tax relief credit?
FARMLAND PRESERVATION CREDIT FARMLAND TAX RELIEF CREDIT Farm real estate taxes are limited to $6,000. Farm real estate taxes are limited to $7,894. Prior year farm property taxes must be paid in full unless an alternative method of computing the credit is used. Prior year farm property taxes must be paid in full. Individual claimant may not claim Homestead Credit. Individual claimant may claim Homestead Credit. Farmland must meet gross profits requirement of $6,000 gross farm profit in current year or $18,000 gross farm profit for current year and two immediately preceding tax years unless at least 35 acres are enrolled in a conservation reserve program. There is no gross profit requirement when an alternative method of computing the credit is used. Farmland must meet gross profits requirement of $6,000 gross farm profit in current year or $18,000 gross farm profit for current year and two immediately preceding tax years unless at least 35 acres are enrolled in a conservation reserve program. Real estate taxes on entire acreage in exclusive agricultural zoning district or included in farmland preservation agreement may be used in computation. Real estate taxes on farmland only may be included in the computation. Real estate taxes on improvements must be excluded. Farm acreage does not need to be in exclusive agricultural zoning or subject to a farmland preservation agreement. The amount of the credit is dependent upon the amount of the claimant's household income and the real estate taxes levied. The amount of the credit is a flat percentage of the real estate taxes levied. Soil and water conservation standards must be met. No soil and water conservation standards necessary. Credit may need to be repaid when the farmland is sold. No repayment is necessary when land is sold. Schedule FC must be filed to claim credit. Credit is claimed on individual or fiduciary income tax return or corporation franchise or income tax return.
FOR MORE INFORMATION PLEASE CONTACT:
WISCONSIN DEPARTMENT OF REVENUE
Farmland Preservation Credit Taxpayer Assistance
P.O. Box 8906
Madison, WI 53708-8906
Phone: (608) 266-2442
Fax: (608) 267-0834
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Last updated January 8, 2009