Should I Switch to an LLC
OBBBA now allows LLCs to get multiple payments, but should you switch now
The One Big Beautiful Bill Act made a major change to what types of entities can get more than one payment under Title I of the “Farm Bill”.
Before OBBBA, only a general partnership or a qualified joint venture (essentially a general partnership) could have more than one payment limit. Other entities such an LLC’s, S corporation’s or regular corporations were limited to one payment limit.
As an example, assume Adam, Ben and Charles were interested in creating an entity to farm together under the old rules. If they formed a general partnership with equal ownership, then the ABC GP would qualify for three payment limits or $375,000 (3 X $125,000). If instead, their attorney or CPA talked them into creating an LLC or S corporation, then the payment limit would be $125,000.
OBBBA has now created a new term “Qualified Pass-Through Entity” which allows for more than one payment limit ($155,000 limit for 2025 crop year). A Qualified Pass-Through Entity is any:
