Equipment Gains Not Automatically Farm Income for SDRP
The new rules do not apply to SDRP
SDRP Stage 1 and 2 allow farmers an increased payment limit if their farm adjusted gross income (AGI) is greater than 75% of total AGI.
AGI is on a rolling three-year average with one year in arrears. For 2023 SDRP you will use your 2019-2021 AGI and for 2024 you will use 2020-2022 AGI. There are no exceptions for special gains, etc. It is solely based on what is on the tax return.
The One Big Beautiful Bill Act (OBBBA) now states that equipment gains are automatically farm income, however, this is only effective for crop years beginning in 2026. We are not sure about 2025, but we know it does not apply for 2023 or 2024 which are the current SDRP years.
