With the USDA’s $10 billion loan forgiveness program, social disadvantaged farmers could be eligible for substantial tax benefits. Here are five important tips to help you maximize your eligibility.
What is the $10 billion loan forgiveness program?
The USDA Loan Forgiveness Program was created in 2012 to help farmers with their debt. The program offers up to $10 billion in assistance, but only if the farmer meets certain eligibility requirements. In order to qualify, a person must be an eligible farmer, they must have accepted a loan from the USDA and they must provide financial records that show the amount of debt that is forgiven.
There are thousands of social disadvantaged farmers in need of help. On October 4th, the USDA announced their loan forgiveness program would provide $10 billion in direct loans. The program is open to beginning, socially disadvantaged farmers and ranchers who meet federal income guidelines at the time they apply. It’s estimated that as many as 60,000 farms could qualify for a partial or complete loan forgiveness.
What are some of the important factors to consider when filing a loan forgiveness application?
There are many different factors to consider when applying for a USDA loan forgiveness. Some of the most important factors include:
When you have a loan forgiven, it is a great day for your pocketbook. It is also important to note that the USDA will consider factors like the following when determining whether or not an application is approved: farming experience, general application, financial responsibility and assets, community involvement, and other relevant information.
What are the eligibility requirements for this program?
The USDA Loan Forgiveness program was created in 2014 to provide forgiveness of loans and other liabilities for social disadvantaged farmers. Eligible farmers must apply annually for a loan forgives or payment reduction. Qualifying farms are those that are engaged in agricultural production and also have a social or economic impact on the community.
This program is only for social disadvantaged farmers and those that are committed to farming the land. The farm’s eligibility appears to be based on household income, the type of operation, and farming history.
How will you know if your application is approved?
The USDA Loan Forgiveness program is a great way for indebted farmers to get out of debt. To qualify for the program, members must…apply before June 30th; have less than $1,000 in qualified farm expenses; and receive an annual profit from farming that is equal to or greater than the payment received under the loan forgiveness program.
There are no official requirements for the types of social disadvantaged farmers who can apply for USDA agricultural loan forgiveness. However, the USDA defines that its program is only for those farmers living on poverty-level incomes, who have operated their farm for at least three years before applying and are in a rural location.
How much can you save on taxes with a successful application?
Farmers that are social disadvantaged or who have a farm loan payment of $0 may be eligible for a USDA Loan Forgiveness program. This program can save you hundreds, even thousands, of dollars in taxes throughout the life of your loan. You must apply for this program within 3 years of when your loan was issued or alternatively, before the end of this year (2018). There are 5 tips that we recommend you to keep in mind when applying:
Social Disadvantaged Farmers Program (SDFP) grants are available to eligible farmers. These loans provide funding for agricultural land, buildings, and equipment. If you’ve been unsuccessful in applying for a loan from a non-USDA lender, the USDA may be able to give you a better deal through their SDFP program. If you qualify and apply successfully, your costs can be reduced significantly by tax credits or deductions.