Month: January 2022

An Agricultural Employer’s 2021 Tax Obligations: A Series

By: Jeffrey K. Lewis, Attorney and Research Specialist, Agricultural & Resource Law

As we settle into 2022 and regroup after a busy holiday season, one of things an agricultural employer should be thinking about is taxes, more specifically, have they met their obligations when it comes to federal and state employment taxes.  In this two-part series, we discuss the federal and state taxes that an employer is required to withhold from employees’ wages and the tax obligations that an agricultural employer is solely responsible for.  This series covers the taxes and obligations an employer has because of the wages paid to employees.  This series does not cover the business income or personal income tax reporting obligations of agricultural employers.

The first part of this series focuses on federal taxes and an employer’s obligations when it comes to social security, Medicare, federal income, and federal unemployment taxes. We also discuss when to pay the taxes and how to pay them.  The information contained within this series is not meant to be legal and/or tax advice.  Agricultural employers should seek out the counsel and guidance of an attorney or other tax professional to help them ensure they are compliant with their obligations under federal tax law.

Social Security and Medicare Taxes.  Generally speaking, an employer must withhold social security and Medicare taxes from the wages it pays its employees.  However, there are special rules for agricultural employers.  The $150 Test or the $2,500 Test will help determine if an agricultural employees’ wages are subject to social security and Medicare taxes along with federal income tax withholding requirements.

All cash wages that an employer pays to an employee during the year for farmwork is subject to social security, Medicare, and federal income tax withholding requirements if either of the following tests are met:

  • The $150 Test.  An employer pays cash wages to an employee of $150 or more in a year for farmwork.
    • This includes all cash wages paid on a time, piecework, or other basis.
  • The $2,500 Test.  The total that an employer paid for farmwork (cash and non-cash wages) to all employees is $2,500 or more during the year.

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Ohio Grape Grower Survey Coming Soon!

The Ohio grape industry produces grapes for wine, juice, and table grape use.  Over the last decade, the industry has grown rapidly in our state. Unfortunately, the USDA ceased conducting a regular Ohio grape census five years ago, making it difficult to track this growth or collect accurate information about the number of acres and production by grape variety. To fill this gap, the Ohio Grape Industries Committee has commissioned researchers at The Ohio State University to conduct an independent survey of all Ohio grape growers.

Dr. Douglas Jackson-Smith, a professor in the College of Food, Agricultural, and Environmental Sciences at Ohio State, is leading the survey effort which is designed to reach all Ohio producers who grew wine, juice, or table grapes in 2021. Beginning the third week of January, researchers will send the survey to a comprehensive list of grape growers in the state, with an opportunity to respond through the mail or online.

The survey is voluntary and all responses will be treated as confidential. To get an accurate picture of the size and scope of the current Ohio grape industry, it will be critical to hear back from all producers. Aggregated results will be shared in a report that will be available to farmers, wineries, juice processors, and others to inform their decisions.

If you are a grape grower and do not receive a copy of the survey or if you have questions about the project, please reach out to Dr. Jackson-Smith at Jackson-smith.1@osu.edu or 330-202-3540.

It’s a good time for a farmland leasing update

By:Peggy Kirk Hall, Associate Professor, Agricultural & Resource Law

Winter is a good time to review farm leases, and current information is critical to that process.  That’s why our Farm Office team is offering its Ohio Farmland Leasing Update, a webinar on February 9, 2022 from 7 to 9 p.m.   I’ll be joined for the webinar by co-speakers Barry Ward, Leader of Production Business Management for OSU Extension, and attorney Robert Moore.

On the legal side, we’ll share legal information to help parties deal with addressing conservation practices in a leasing situation, using leases in farmland succession planning, Ohio’s proposed new law about providing notice of termination, and ensuring legal enforceability of a lease.  On the economic side, Barry Ward will provide a current economic outlook for Ohio row crops, research on cash rent markets for the Eastern Corn Belt, and rental market outlook fundamentals.  We’ll also overview farmland leasing resources.

There is no fee for the webinar, but registration is necessary.  Register at https://go.osu.edu/farmlandleasingupdate.

What to do with Compacted Pastures?

Erika Lyon, OSU Extension Educator ANR, Jefferson and Harrison Counties

During the last couple of weeks in December and into early 2021, eastern Ohio saw warmer-than-usual temperatures and a lot of rain. What does this mean for our pastures and hay fields?

With rain comes the mud, and with mud often comes compaction. Compaction in forage crops often occurs within the top 3-4 inches of soil, but it can also appear at deeper levels, forming “hard pans” that restrict the movement of water.

Compacted soils mean reduced pore space to house water and air — two important components of healthy soils. Nearly half of soils should consist of pore space, whether macro- or micro-pores to allow roots to develop deeper and water to better infiltrate downwards.

Compaction can ultimately lead to increased drought and disease susceptibility of plants, even when it appears there is standing water in a field.

 

 

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