Unusual income to complicate tax filings
A range of government farm support programs and legal settlements, including the Market Facilitation Program (MFP), Coronavirus Food Assistance Program (CFAP1 and CFAP2), Paycheck Protection Program (PPP), Syngenta payments, ARC/PLC payments and crop insurance, pumped close to $40 billion into the U.S. farm economy in 2020. In February 2020, the U.S. Department of Agriculture was predicting a reduction in U.S. farm income, but now is predicting growth in farm income, up to $115 billion.
This increase in government income could cause some unexpected tax consequences for some farmers this year. Even though crop and livestock prices were low for much of the year, they have now improved, and coupled with government payments, farm income is looking better than expected.
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