Manufacturing and Agriculture Credit - H. Agriculture Questions

  1. ​​ Can a person who rents his or her farmland to another person claim the credit?

  2. Are price protection crop insurance proceeds included as production gross receipts?

  3. Are crop damage insurance proceeds included as production gross receipts?

  4. Are farm subsidy payments (such as milk income loss contract payments, direct/counter-cyclical payments, etc.) included as production gross receipts?

  5. Are commodity credit corporation loans included as production gross receipts?

  6. Is farm income that is allocated from a cooperative to its members on a federal Form1099-PATR included in production gross receipts?

  7. A married couple both have farming related businesses; however, each files their own federal Schedule F. The husband is a crop farmer with a loss and the wife owns a greenhouse operating at a profit. When preparing the Schedule MA-A for the agriculture credit, do we need to "net" their production gross receipts and costs for the credit?

  8. Does the gain from the sale of purchased or raised breeding animals qualify as production gross receipts?

  9. If a taxpayer ​puts in tiling or fencing that is an improvement to the land, are the January 1 cost and December 31 cost (which includes the improvements) both used to compute the average value of the agriculture property factor?

  10. Are amounts paid to me for custom labor included in my qualified production gross receipts (e.g., fees received to custom bale hay)?

  11. If the farmer pays his wife or dependent child a wage that is reported on a W-2 from the farm, is it included on Line 8 of the Production Gross Receipts Factor?

  12. Are amounts received for crop insurance, milk income loss contract payments, etc., included on Line 8 of the Production Gross Receipts Factor?

  13. Does a farmer deduct crop damage insurance premiums as a direct or indirect expense on Schedule MA-A?

  14. Is the farmland preservation credit, or any other Wisconsin income tax credit, included in qualified production activities income?


Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations enacted as of March 4, 2020: Sections 70.32, 71.05, 71.07, 71.26, 71.28, and 71.80, Wis. Stats.

Laws enacted and in effect after March 4, 2020, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to March 4, 2020, that is contrary to the information in this document is superseded by this document, pursuant to sec. 73.16(2)(a), Wis. Stats.

FOR QUESTIONS OR COMMENTS CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Corporation Franchise/Income Tax Assistance
PO Box 8906
Madison, WI 53708-8906
Phone: (608) 266-2772
Fax: (608) 267-0834
Email additional questions to DORFranchise@wisconsin.gov

Guidance Document Number: 100163

March 4, 2020