The QPTE AGI Break: Why It Now Matters Where You Test the Income
OBBBA has enhanced payments for entities over the old AGI limit
Bottom line up front: under OBBBA, a qualified pass-through entity (QPTE) — your LLC or S corporation — no longer loses its commodity payments just because the entity’s AGI is too high. The AGI test now runs at the owner level, not the entity level. For a farm with high entity income spread across several owners, that one change is the difference between a full payment and nothing.
Let me show you with real numbers.
The setup
Triple Creek Farms LLC is taxed as a partnership with three equal members, each owning one-third. For the 2026 crop year the ARC/PLC payment limit is $164,000 per person. The farm’s AGI runs $1.5 million at the entity level.
Under the old rules, that $1.5 million entity AGI blew past the $900,000 limit and the whole operation was disqualified. One limit, one AGI test, applied to the entity. Game over.
What OBBBA changed
Two things now work in the farm’s favor.
