FSA Has C Corporation Gross Income Correct

Last week we posted on the errors in the FSA 6PL Handbook on gross income. At least one example is correct.

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As most of you know by now there are two payment limits for the new Emergency Commodity Assistance Program (ECAP). The normal limit is $125,000 but if your gross farm income is more than 75% of total gross income (on a three-year average of 2020-2022), then the limit doubles to $250,000.

The regulations indicate what is farm income but does not have a definition of gross income. We then go to FSA Handbook 6PL which added details for the ECAP program including example of what is gross income and a sample letter that attorneys, CPAs, and enrolled agents can prepare to attach to Form CCC-943 to indicate if the farmer qualifies for an increased payment.

In our post last week, we indicated that the examples of gross income produced by FSA were incorrect since they were referring to the gross income on each respective tax form (1040, 1065, 1120, 1120-S, etc.). Gross income on these forms is generally after all expenses are reported so this definition of gross income substantially understates true gross income and, in most cases, gross income would be less than farm gross income which is not possible in almost all cases.