A recent federal tax court ruling might affect the amount of farmland in Southeast Iowa that’s put into conservation programs.
A U.S. Tax court has ruled that people who own land enrolled in the Conservation Reserve Program, or CRP, have to pay a “self employment tax” even if they’re not farming the land.
Farm Management Specialist for Southeast Iowa with Iowa State University Extension, Bob Wells, said farmers must bid to get into the CRP.
He added that bids may go up to reflect the cost of land owners paying for the tax.
"If they try to bid in that cost, their bids will be more than what the county FSA has allowable for CRP rates in that county," Wells said.
Wells said the most noticeable possible effect would be a drop in the number of acres in South East Iowa enrolled in the program.
He also said that he believes it's a fallacy that people who enroll land into the CRP to make a profit, saying that the payment they receive through the program often doesn't match what could be made by renting the land out.