The Inflation Reduction Act offered a vital lifeline to many farmers when it authorized debt relief for economically distressed farmers and payments to those who have experienced discrimination. However, under current law those borrowers — still working themselves out of tough financial situations — will still face a tax liability on those payments.
A new bill introduced by Senator Booker on December 8 would remedy that tax burden by making both debt relief and discrimination payments under the IRA non-taxable. With enough support, this provision could be included in the year-end budget bill which Congress is trying to pass.
Farming is a high-investment and high-risk vocation, with many factors (weather, prices, and more) out of a farmer’s control, no matter how hard they work — and financial crisis can be a devastating and prolonged experience. When a farmer’s financial crisis is a result of discrimination from the federal agencies which are supposed to be there to support them, it is particularly painful.
The debt relief payments and discrimination payments authorized in the Inflation Reduction Act are an important helping hand to help farmers get back on their feet after facing adverse financial circumstances or discrimination. The Family Farmer and Rancher Tax Fairness Act would make that helping hand complete by ensuring that farmers don’t face a subsequent tax burden from those payments. Ask your legislators to support it today!
If you would like more information about debt relief and discrimination payments visit our earlier blog on the subject.