Van der Hoeven Chairs National Farm Income Tax Extension Committee

Guido van der Hoeven, Extension Specialist and Senior Lecturer from the Department of Agricultural and Resource Economics, recently made his 22nd annual trip to Washington D.C. to chair meetings of the National Farm Income Tax Extension Committee (NFITEC). NFITEC is comprised of members from 17 land-grant universities.

On May 20, 2019 the committee met all day with members of the IRS Publications Branch to discuss 2019 updates to IRS Publication 225, The Farmer’s Tax Guide.  With the passage of the Tax Cuts and Jobs Act of 2017 (TCJA) the 2018 tax year was the first to implement tax reform resulting from the new law.  Discussion held how to improve the text and explanation of the new tax law in light of the first year’s issues which became evident during the income tax filing season for tax year 2018 which occurred during the months of January and April of 2019.

On May 21, 2019 NFITEC members met with the Joint Committee on Taxation (JCT) for two hours to discuss with JCT staff the issues impacting agricultural taxpayers which arose from TCJA. The issue of most concern was the correct income tax reporting and calculation of the new Internal Revenue Code (IRC) section 199A, the Qualified Business Income Deduction (QBID).  IRS guidance has been slow in development and technical corrections are anticipated after the first year’s implementation. Other broad taxation issues were discussed affecting production agriculture.

NFITEC members also met with staff from the House Committee on Agriculture to likewise discuss the impacts of TCJA to farmers and ranchers.  Discussion also covered how to structure some tax incentives to assist young and beginning farmers gain access to farm and ranch land.  Late in the afternoon the Committee met with staff from the House Ways and Means Committee (the tax legislation writing committee of Congress) to continue the discussion of TCJA implications and how technical corrections may be needed to address some of the issues for not only production agriculture but also small businesses across the United States.

NFITEC members, as a result of these two days of meetings, have been engaged in follow-up discussion and responding to questions from the various individuals with whom they met.  Tax reform and education is a never ending task. These meetings were productive and useful with future benefits to farmers and ranchers of the United States in what is hoped to be an accurate 2019 Farmer’s Tax Guide.