FSA Tells Us How Spouses Split Income for the 75% Farm Income Test
If your MFJ income is over $900k, then you can split income based on MFS
FSA issued Notice PL-318 on June 11, 2026. It answers a question we have been fielding for years. If a husband-and-wife file jointly and a CPA splits their income so one spouse gets under the $900,000 average AGI cap, which numbers do you use for the 75% farm income test?
The answer is the same split. You do not get to allocate income one way for the $900,000 test and a different way for the 75% test. Whatever manner the CPA used to divide the average AGI drives both.
The example
Individual A farms. Individual B has off-farm income. Joint average AGI is $1.5 million, well over the cap.
