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<strong>2021</strong> means many tax<br />
changes for farmers<br />
By Kristine A. Tidgren<br />
Staff Attorney<br />
Center for Agricultural Law & Taxation<br />
<strong>Iowa</strong> State University<br />
eastern <strong>Iowa</strong> farmer<br />
Congress responded to the<br />
COVID-19 pandemic with legislative<br />
packages to stimulate<br />
the economy and aid Americans.<br />
These laws provided relief<br />
through changes impacting tax returns.<br />
Last year, we saw the CARES Act, the Families<br />
First Coronavirus Response Act, and<br />
the Consolidated Appropriations Act bring<br />
economic impact payments, the Payroll<br />
Protection Program, and paid family and<br />
sick leave credits, among many other relief<br />
provisions. This year, it was the American<br />
Rescue Plan Act, signed into law March 11.<br />
The $1.9 trillion plan contained many new<br />
laws that will impact a farmer’s <strong>2021</strong> tax<br />
return. Here are several key provisions that<br />
impact farmers’ returns for <strong>2021</strong>.<br />
Third Round of Economic<br />
Impact Payments<br />
Modeling a new <strong>2021</strong> program after<br />
two rounds of economic impact payments<br />
reported on 2020 returns, the Rescue Plan<br />
authorized <strong>2021</strong> recovery rebate payments<br />
to eligible taxpayers at $1,400 per taxpayer<br />
($2,800 in the case of a joint return), plus<br />
$1,400 per dependent. The rebate was paid<br />
for any legal dependent, not just children<br />
under the age of 17.<br />
As with the two prior rounds of payments<br />
(one in mid-2020 and one at the beginning<br />
of <strong>2021</strong>), the payment deposited by the<br />
Treasury was an advance payment of a<br />
refundable credit, but this time for tax year<br />
<strong>2021</strong>. Eligibility for the <strong>2021</strong> rebate payment<br />
is more restrictive. The credit begins<br />
to phase out for those who were married<br />
filing a joint return with $150,000 of adjusted<br />
gross income. Those earning $160,000 a<br />
year or more are not eligible for the credit.<br />
For singles, the credit begins to phase out<br />
with $75,000 of income and those with<br />
$80,000 of income or more are ineligible.<br />
The prior two rounds of payments also began<br />
to phase-out with incomes at $150,000<br />
(MFJ) and $75,000 (singles), but the phaseout<br />
was much more gradual, meaning that<br />
those with higher incomes qualified for a<br />
reduced credit.<br />
When farmers file their <strong>2021</strong> returns,<br />
Make a difference with a<br />
charitable<br />
Gift of<br />
Grain!<br />
Giving is simple...<br />
Gifts of grain are simply excluded<br />
from your income. You deduct the cost<br />
of growing crops.<br />
Local grain elevators and processors<br />
including ADM and Cargill are set up<br />
to receive your Gift of Grain.<br />
as harvest is upon us, think about<br />
ways you can continue to grow<br />
your yield even after harvest!<br />
Donating a gift of grain is a simple way<br />
to help grow the future of our youth.<br />
AnY questions, pLeAse ContACt:<br />
community Foundation<br />
of Jackson county (563-588-2700)<br />
Skott Gent (563-590-9232)<br />
Dean engel (563-357-4706)<br />
118 <strong>Eastern</strong> <strong>Iowa</strong> <strong>Farmer</strong> | <strong>Fall</strong> <strong>2021</strong> eifarmer.com<br />
<strong>Eastern</strong><strong>Iowa</strong><strong>Farmer</strong>_<strong>Fall</strong><strong>2021</strong>.indd 118<br />
9/15/21 10:27 am
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