Agricultural Risk Coverage and Price Loss Coverage for the 2021 Crop Year

By Ben Brown, The Ohio State University

The 2018 Farm Bill reauthorized the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) safety net programs that were in the 2014 Farm Bill. Producers must enroll  in ARC/PLC for the 2021 crop year through their local Farm Service Agency office. Producers can amend the program elections they made for the 2019 and 2020 crop years for the 2021 crop year. The signup period for the 2021 crop year is open now, and the deadline to enroll and make amendments to program elections is March 15, 2021.

If changes are not made by March 15, 2021 deadline, the election defaults to the programs selected for the 2020 crop year with no penalty. Producers will have the opportunity to amend program elections again for the 2022 and 2023 crop years.

Producers again have the option to enroll covered commodities in either ARC-County, ARC-Individual, or PLC. Program elections are made on a crop-by-crop basis unless selecting ARC-Individual where all crops under that FSA Farm Number fall under that program. ARC program payments are made when crop revenue falls below a guaranteed level, while PLC payments are made when a crops specific effective price is lower than its reference price. These are the same program options that were available to producers during the 2019 and 2020 crop years. In some cases, producers may want to amend program election to better manage the potential risks facing their farms during the 2021 crop year.

On December 1, 2020 at 10:00 a.m. EST program directors from the Ohio Farm Service Agency and Ohio State University Extension will host a free informational webinar about ARC/PLC enrollment and election for the 2021 crop year. During this free 1-hour webinar, state leaders will cover program design, economic considerations and frequently asked questions. To make sure your question is addressed during the webinar, please send to Ben Brown at brown.6888@osu.edu or 660-492-7574 prior to December 1, 2020.

To register, visit: go.osu.edu/arc_plc

 

Agricultural & Natural Resources Income Tax Issues Webinar

by: Barry Ward, Director, OSU Income Tax Schools &  Julie Strawser, OSU Income Tax Schools

Tax practitioners, farmers and farmland owners are encouraged to connect to the Agricultural and Natural Resources Income Tax Issues Webinar (via Zoom) on Dec. 18 from 8:45 a.m. to 3:30 p.m. The event is sponsored by Ohio State University Income Tax Schools and Purdue University Income Tax Schools.

The webinar focuses on issues specific to farm tax returns related to agriculture and natural resources and will highlight timely topics and new regulations related to COVID-related legislation.

The program is an intermediate-level course for tax preparers whose clients include farmers and rural landowners. Farmers who prepare and file their own taxes will also benefit from the webinar.

Topics to be addressed and discussed during the Ag Tax Issues webinar include:

COVID-19 RELIEF FOR AGRICULTURAL BUSINESSES

TIMELY TAX ISSUES IMPACTING AGRICULTURAL PRODUCERS

QBI ISSUES FOR FARMERS AND LANDOWNERS

RETIREMENT AND SOCIAL SECURITY CONSIDERATIONS FOR FARMERS

FORM 4797, SALE OF BUSINESS PROPERTY

LIKE-KIND EXCHANGE ISSUES IMPACTING FARMERS

GETTING OUT OF THE BUSINESS OF FARMING

CURRENT UNICAP RULES FOR ORCHARDS AND VINEYARDS

TAX ISSUES ARISING UPON THE DEATH OF A FARMER

The cost for the one-day school is $150, and applications have been made for the following continuing education credits:

  • Accountancy Board of Ohio, CPAs (6 hours)
  • Office of Professional Responsibility, IRS (6 hours)
  • Supreme Court of Ohio, Attorneys (5.25 hours)

Registration includes the Agricultural Tax Issues Workbook. The deadline to register is Dec. 8 to ensure participants will receive the workbook in the mail before the workshop. The live webinar will also feature options for interaction and the ability to ask questions about the presented material.

More information on the workshop, including how to register, can be found at go.osu.edu/agissues2020

Contact Barry Ward at 614-688-3959, ward.8@osu.edu or Julie Strawser at 614-292-2433, strawser.35@osu.edu with questions.

Farmer and Farmland Owner Income Tax Webinar

by: Barry Ward, Director, OSU Income Tax Schools, College of Food, Agricultural and Environmental Sciences, OSU Extension

Are you getting the most from your tax return? Farmers and farmland owners who wish to increase their tax knowledge should consider attending this webinar that will address tax issues specific to this industry. Content focuses on important tax issues and will offer insight into new COVID related legislation.

Mark your calendars for December 3rd, 2020 to participate in this live webinar from 6:30 to 8:30 pm. The event is a joint offering from OSU Income Tax Schools which are a part of OSU Extension and the College of Food, Agricultural and Environmental Sciences and Purdue University Income Tax Schools.  If you are not able to attend the live webinar, all registered participants will receive a link to view the recorded webinar at a time of their convenience. This link will be available through the tax filing season.

The two-hour program is targeted towards owners who file their own farm taxes or simply wish to arm themselves with more tax information that will help them to better plan for tax filing.

Topics to be discussed during the webinar include:

  • Tax Issues related to COVID-related legislations including tax credits, PPP loans, EIDL loans etc.
  • New 1099-Misc and 1099-NEC
  • Tax planning in an unusual year: prevented planting and revenue crop insurance indemnity payments, CFAP payments, etc.
  • Like Kind Exchanges (farm machinery and equipment no longer are eligible for this provision – this is a significant change), how this change may affect state income tax and how this change may affect your Social Security credits and eventual payments
  • Qualified Business Income Deduction, sales to cooperatives, lease income
  • Other topics

The cost for the webinar is $35. To register, go to https://farmoffice.osu.edu/tax/farmer-and-farmland-owner-income-tax-webinar

For more information, contact Julie Strawser at strawser.35@osu.edu, 614-292-2433 or Barry Ward at ward.8@osu.edu

 

OSU Extension Announces Two-Day Tax Schools for Tax Practitioners & Agricultural & Natural Resources Income Tax Issues Webinar

by: Barry Ward & Julie Strawser, OSU Income Tax Schools

Dealing with the tax provisions of the COVID-related legislation for both individuals and businesses are among the topics to be discussed during the upcoming Tax School workshop series offered throughout Ohio in November and December.

The annual series is designed to help tax preparers learn about federal tax law changes and updates for this year, as well as learn more about issues they may encounter when filing individual and small business 2020 tax returns.

The tax schools are intermediate-level courses that focus on interpreting tax regulations and changes in tax laws to help tax preparers, accountants, financial planners and attorneys advise their clients. The schools offer continuing education credit for certified public accountants, enrolled agents, attorneys, annual filing season preparers and certified financial planners.

This is another important year for tax education as the new COVID-related legislation creates some challenges for tax practitioners to prepare tax returns. These schools offer an excellent set of instructors with a great deal of experience and training along with a top reference workbook to prepare tax practitioners to best serve their clients during this ongoing process of incorporating recent tax law changes in completing tax returns.

The workbook alone is an extremely valuable reference as it offers over 700 pages of material including helpful tables and examples that will be valuable to practitioners. Sample chapters of the reference workbook can be found at: https://go.osu.edu/WorkbookChapters.

Topics/chapters to be presented this year during the two-day tax schools include:

Financial Distress, S-Corporation Tax Issues, IRS Issues, Business Entity Issues, Agricultural and Natural Resource Issues, Retirement and Investment Issues, Individual Tax Issues, Business Tax Issues, Trusts and Estates, Rulings and Cases, New Legislation.

This year, OSU Income Tax Schools will offer both in-person schools and online virtual schools.

In person schools:

  1. Lima – November 2-3

Old Barn Restaurant and Grill

3175 W Elm Street, Lima, OH 45805

  1. Fremont – November 4-5

Ole Zim’s Wagon Shed

1375 State Route 590, Gibsonburg, OH 43431

  1. Ashland – November 11-12 SOLD OUT

Ashland University

John C. Meyers Convocation Center

820 Clermont Ave., Ashland, OH  44805

  1. Dayton – November 17-18

Presidential Banquet Center

4548 Presidential Way, Kettering, OH  45429

  1. Columbus – December 10-11 SOLD OUT

Nationwide & Ohio Farm Bureau 4-H Center

2201 Fred Taylor Dr., Columbus, OH 43221

 

Virtual Online Schools:

  1. Webinar (Zoom)

November 9, 13, 16 and 19

Each Day 12:30 – 5pm

Zoom Webinar

  1. Livestream (Zoom)

December 10-11

Livestream of Columbus Tax School Location via Zoom

In addition to the tax schools, the program offers a separate, two-hour ethics webinar that will broadcast Dec. 4 at 10 a.m. The webinar is $25 for school attendees and $50 for non-attendees and is approved by the IRS and the Ohio Accountancy Board for continuing education credit

Register two weeks prior to the school date and receive the two-day tax school early-bird registration fee of $375.  This includes all materials, lunches and refreshments. The deadline to enroll is 10 business days prior to the date of each school. After the school deadline, the fee increases to $425.

Additionally, the 2020 RIA Federal Tax Handbook is available to purchase by participants for a discounted fee of $45 each. Registration information and the online registration portal can be found online at:

http://go.osu.edu/2020tax.

A webinar on Ag Tax Issues will be held Dec. 18 from 8:45 a.m. to 3:30 p.m.

If you are a tax practitioner that represents farmers or rural landowners or are a farmer or farmland owner that prepares your own taxes, this five-hour webinar is for you. It will focus on key topics and new legislation related specifically to those income tax returns.

Registration, which includes the Ag Tax Issues workbook, is $150. Register by mail or on-line at http://go.osu.edu/agissues2020.

Participants may contact Ward at 614-688-3959, ward.8@osu.edu or Julie Strawser 614-292-2433, strawser.35@osu.edu for more information.

Harvest Outlook to be held on October 1 at 8:30 a.m.

by: Ben Brown, Assistant Professor of Professional Practice in Agriculture Risk Management,

Make plans to join OSU Extension for a Harvest Outlook covering climate and grain markets October 1, 2020 at 8:30 a.m. EST. Atmospheric specialist, Aaron Wilson, with the Byrd Polar and Climate Research Center at The Ohio State University will cover upcoming weather as harvest starts across the state and an outlook on climate for the quarter. Assistant Professor of Professional Practice in Agriculture Risk Management, Ben Brown, will cover the fourth quarter available grain stocks of corn and soybeans. The United States Department of Agriculture releases monthly forecasts of grain supply and demand, but the quarterly grain stocks reports provide performance checks. The September report serves as the conclusion to the previous marketing year, but also provides insight to current demand. Information and registration to this free webinar can be found at go.osu.edu/2020agoutlook.

Farm Office Live Scheduled for October 7, 2020

Join the OSU Extension Farm Office team for discussions on the latest agricultural law and farm management news.  The next session will be held on October 7, 2020 8:00 – 9:30 a.m.

Farm Office Live will be back for a review of the latest on round two of the Coronavirus Food Assistance Program (CFAP), 2020 crop enterprise budgets, new custom rates and Western Ohio Cropland Values and Cash Rents survey summary, Ohio’s COVID-19 immunity legislation, and other current issues in farm management.

Join our experts for quick presentations and Q & A.   Go to https://farmoffice.osu.edu/farmofficelive  to register or view past webinars and PowerPoint slides.

 

OSU Agricultural Lender Seminar Virtual for 2020

For over 30 years, OSU Extension has been providing Ohio’s agricultural lenders with professional development training.  The seminar is scheduled for October, but the venue will be online.  The 2020 OSU Extension Agricultural Lender Seminar will be help on October 21, 2020 from 9:00 am to 12:00 pm.

Lenders from across Ohio and beyond are encouraged to join the seminar.  The planning committee has developed a half-day program that will provide skills and knowledge that will be directly used with their customers as well as information and resources that support the responsibilities of a professional lender.  The seminar will also provide industry awareness of issues that strengthen the lender’s touch with today’s agricultural issues.

“We have national and state experts on the agenda again this year,” says Bruce Clevenger, OSU Extension Educator in Defiance County.  Clevenger leads the team to organize and deliver the training to over 150 lenders annually.

“To provide a national view of the U.S. Ag and Financial Conditions we have David Oppedahl of the Federal Reserve Bank of Chicago on the schedule.” David Oppedahl is a senior business economist in the Economic Research Department. He conducts research on the agricultural sector and rural development, as well as analyzes business conditions and the regional economy. He directs the Federal Reserve District of Chicago’s survey of agricultural banks on agricultural land values and credit conditions and publishes the results in AgLetter—the Chicago Fed’s quarterly agricultural publication.

Other experts and their topics from Ohio State include: Ben Brown, AEDE, Grain Prices and Farm Policy; Barry Ward, OSU Extension, Enterprise Budgets and Returns per Acre; Peggy Hall, OSU Extension, Niche/Small Farm Legal Issues; Rob Leads, OSU Exension, Growing Customer Relationships.

Program pre-registration is required and is now open at: https://u.osu.edu/aglenderseminars/

“The OSU Ag Lender Seminars have provided professional development to new, mid-career and experienced lenders.  About one third of our attendees fall into each of those three tenure categories.”

Clevenger says, “The seminars have traditionally been in-person meetings in Ottawa, Urbana, and Wooster, Ohio, but the 2020 seminars will be accessible state-wide and beyond and will bring the same value that lenders have expected and received for decades.”

For more information about the OSU Extension Ag Lender Seminar, visit https://u.osu.edu/aglenderseminars/ ,contact Bruce Clevenger, OSU Extension Educator at clevenger.10@osu.edu or call 419-782-4771.

 

Expansion of the Coronavirus Food Assistance Program Begins September 21

WASHINGTON, Sept. 18, 2020 – President Donald J. Trump and U.S. Secretary of Agriculture Sonny Perdue today announced up to an additional $14 billion for agricultural producers who continue to face market disruptions and associated costs because of COVID-19. Signup for the Coronavirus Food Assistance Program (CFAP 2) will begin September 21 and run through December 11, 2020.

“America’s agriculture communities are resilient, but still face many challenges due to the COVID-19 pandemic. President Trump is once again demonstrating his commitment to ensure America’s farmers and ranchers remain in business to produce the food, fuel, and fiber America needs to thrive,” said Secretary Perdue. “We listened to feedback received from farmers, ranchers and agricultural organizations about the impact of the pandemic on our nations’ farms and ranches, and we developed a program to better meet the needs of those impacted.”

Background

The U.S. Department of Agriculture (USDA) will use funds being made available from the Commodity Credit Corporation (CCC) Charter Act and CARES Act to support row crops, livestock, specialty crops, dairy, aquaculture and many additional commodities. USDA has incorporated improvements in CFAP 2 based from stakeholder engagement and public feedback to better meet the needs of impacted farmers and ranchers.

Producers can apply for CFAP 2 at USDA’s Farm Service Agency (FSA) county offices. This program provides financial assistance that gives producers the ability to absorb increased marketing costs associated with the COVID-19 pandemic. Producers will be compensated for ongoing market disruptions and assisted with the associated marketing costs.

CFAP 2 payments will be made for three categories of commodities – Price Trigger Commodities, Flat-rate Crops and Sales Commodities.

Price Trigger Commodities

Price trigger commodities are major commodities that meet a minimum 5-percent price decline over a specified period of time. Eligible price trigger crops include barley, corn, sorghum, soybeans, sunflowers, upland cotton, and all classes of wheat. Payments will be based on 2020 planted acres of the crop, excluding prevented planting and experimental acres. Payments for price trigger crops will be the greater of: 1) the eligible acres multiplied by a payment rate of $15 per acre; or 2) the eligible acres multiplied by a nationwide crop marketing percentage, multiplied by a crop-specific payment rate, and then by the producer’s weighted 2020 Actual Production History (APH) approved yield. If the APH is not available, 85 percent of the 2019 Agriculture Risk Coverage-County Option (ARC-CO) benchmark yield for that crop will be used.

For broilers and eggs, payments will be based on 75 percent of the producers’ 2019 production.

Dairy (cow’s milk) payments will be based on actual milk production from April 1 to Aug. 31, 2020. The milk production for Sept. 1, 2020, to Dec. 31, 2020, will be estimated by FSA.

Eligible beef cattle, hogs and pigs, and lambs and sheep payments will be based on the maximum owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer, between Apr. 16, 2020, and Aug. 31, 2020.

 Flat-rate Crops

Crops that either do not meet the 5-percent price decline trigger or do not have data available to calculate a price change will have payments calculated based on eligible 2020 acres multiplied by $15 per acre. These crops include alfalfa, extra long staple (ELS) cotton, oats, peanuts, rice, hemp, millet, mustard, safflower, sesame, triticale, rapeseed, and several others.

Sales Commodities

Sales commodities include specialty crops; aquaculture; nursery crops and floriculture; other commodities not included in the price trigger and flat-rate categories, including tobacco; goat milk; mink (including pelts); mohair; wool; and other livestock (excluding breeding stock) not included under the price trigger category that were grown for food, fiber, fur, or feathers. Payment calculations will use a sales-based approach, where producers are paid based on five payment gradations associated with their 2019 sales.

Additional commodities are eligible in CFAP 2 that weren’t eligible in the first iteration of the program. If your agricultural operation has been impacted by the pandemic since April 2020, we encourage you to apply for CFAP 2. A complete list of eligible commodities, payment rates and calculations can be found on farmers.gov/cfap.

Eligibility

There is a payment limitation of $250,000 per person or entity for all commodities combined. Applicants who are corporations, limited liability companies, limited partnerships may qualify for additional payment limits when members actively provide personal labor or personal management for the farming operation. In addition, this special payment limitation provision has been expanded to include trusts and estates for both CFAP 1 and 2.

Producers will also have to certify they meet the Adjusted Gross Income limitation of $900,000 unless at least 75 percent or more of their income is derived from farming, ranching or forestry-related activities. Producers must also be in compliance with Highly Erodible Land and Wetland Conservation provisions.

Applying for Assistance

Producers can apply for assistance beginning Sept. 21, 2020. Applications will be accepted through Dec. 11, 2020.

Additional information and application forms can be found at farmers.gov/cfap. Documentation to support the producer’s application and certification may be requested. All other eligibility forms, such as those related to adjusted gross income and payment information, can be downloaded from farmers.gov/cfap/apply. For existing FSA customers, including those who participated in CFAP 1, many documents are likely already on file. Producers should check with FSA county office to see if any of the forms need to be updated.

Customers seeking one-on-one support with the CFAP 2 application process can call 877-508-8364 to speak directly with a USDA employee ready to offer assistance. This is a recommended first step before a producer engages with the team at the FSA county office.

All USDA Service Centers are open for business, including some that are open to visitors to conduct business in person by appointment only. All Service Center visitors wishing to conduct business with FSA, Natural Resources Conservation Service or any other Service Center agency should call ahead and schedule an appointment. Service Centers that are open for appointments will pre-screen visitors based on health concerns or recent travel, and visitors must adhere to social distancing guidelines. Visitors are also required to wear a face covering during their appointment. Our program delivery staff will be in the office, and they will be working with our producers in the office, by phone and using online tools. More information can be found at farmers.gov/coronavirus.

Thinking about storing more grain this fall?

Source: Chris Bruynis, Associate Professor/Extension Educator

There are several market factors that may have farmers looking to increase their storage for this fall. With lower prices, some farmers will look to store grain and hope prices will improve. With the current basis and price improvement between the harvest period compared to the January/March delivery period of 22 to 40 cents for corn and 16 to 34 cents for soybeans, elevators are sending a message to store grain.

The concern I have is that we will use some facilities that are not typically used for grain storage making aeration challenging at best. With poor air movement, grain going into storage will need to be of better quality, lower foreign material, and probably lower moisture.

Farmers interested in learning some strategies for successful drying and storage of grain, specifically corn and soybeans, are invited to join a Zoom Webinar on Monday August 24, 2020 at 8:00 PMDr. Kenneth Hellevang, Ph.D., PE, Extension Engineer and Professor from North Dakota State University will be the featured speaker. He is one of the leading experts on grain drying, handling and storage.

To join the webinar, go to https://osu.zoom.us/j/7911606448?pwd=L1pQQ0VoODROZG56Q015enNBQkVVUT09 and enter the Password: STORAGE

Also, if you cannot attend the program during the broadcast time, the recording will be available on the Ohio Ag Manager website following the program. The recording will be located at  https://u.osu.edu/ohioagmanager/resources.

If you have questions, contact Chris Bruynis, bruynis.1@osu.edu or 740-702-3200. If you need assistance logging in on the evening of the program, contact David Marrison at 740-722-6073 or marrison.2@osu.edu.

 

OSU Income Tax Schools Summer Update Federal Income Tax & Financial Update Webinar

by: Barry Ward, Director, OSU income Tax Schools

 Significant tax related changes as a result of the new legislation passed in response COVID-19 have created some questions and perhaps consternation over the past few months as taxpayers and tax professionals wrestle with how these many changes may affect tax returns this year and beyond. OSU Income Tax Schools is offering a Summer Update to address these issues and other important information for tax professionals and taxpayers.

The OSU Income Tax Schools Summer Update: Federal Income Tax & Financial Update Webinar is scheduled for August 13th and will be presented as a webinar using the Zoom platform.

John Lawrence, CPA, will teach the course that offers continuing education credits for tax professionals and attorneys. Mr. Lawrence has taught at OSU Extension tax schools for over 20 years and developed this curriculum. He retired from the IRS in 2006 and has since run his own firm in Lawrence, Indiana and Wooster, Ohio.

Webinar Content:

New tax provisions implemented by the CARES Act and Families First Coronavirus Response Act and how to account for them such as the new net operating loss rules, the payroll tax credit, etc. Paycheck Protection Program Loan Issues: loan applications, forgiveness issues and the IRS ruling on loan expenditures that are forgiven under PPP are not tax deductible and how to account for them in preparing a return, etc.

Dealing with the IRS in these difficult times.  Also, what it means to the practitioner as to “dos” and don’ts” regarding the announcement that beginning this summer the IRS will allow the electronic filing of amended returns.

The “Hot IRS Audit Issues – Pitfalls for S Corporations and Partnerships”.  Basis of entities as to the rules and related rulings, how to track basis in these entities, creation of basis where none had been computed in prior tax years, losses in excess of basis and when they are not allowed, definition of an excess distribution, taxation of excess distributions, distribution of appreciated property,  conversion of C corporations to S corporations – do and don’ts, computation of the Built-In Gains Tax, inference and imputation of a reasonable wage for purposes of the computation of the qualified business income deduction, etc.

Other rulings, developments, and cases.

Webinar personnel:

John Lawrence, CPA, John M. Lawrence & Associates: Instructor

Barry Ward, Director, OSU Income Tax Schools: Co-Host & Question Wrangler

Julie Strawser, Program Assistant, OSU Income Tax Schools: Co-Host and Webinar Manager

Details:

OSU Income Tax Schools Summer Update

Federal Income Tax & Financial Update Webinar

(Zoom Webinar)

August 13th, 2020: 10am – 3:30 (Lunch Break: Noon – 12:50pm)

Cost: $150

Registration information and link to the registration page can be found at:

https://farmoffice.osu.edu/osu-income-tax-schools

This workshop is designed to be interactive with questions from the audience encouraged.

Continuing education offered:

Accountancy Board of Ohio (5 hours)

IRS Office of Professional Responsibility (5 hours)

Continuing Legal Education, Ohio Supreme Court (4.5 hours)