2025 ARC/PLC Limit is Really $150,880
The 5.7% sequestration limit is applied after the payment limit
A reader sent this question to us:
Question, my wheat PLC payment exceeds the $160,000 even after the 5.7% reduction. Do we get the full $160,000 or is the max payment reduced?
The max payment is reduced. Your check tops out at $150,880.
I know that is not the answer you wanted, and it is the single most common misunderstanding I hear about sequestration. The logic that feels right goes like this: I calculated $200,000 of ARC/PLC, the limit is $160,000, so there is $40,000 of cushion sitting there and the 5.7% haircut should come out of the cushion. It does not work that way. The excess above the limit simply disappears, and then FSA sequesters what is left.
The actual wording
Here is subparagraph 6 G from the 1-ARCPLC handbook:
