Tips on How USDA Discrimination Payments are Taxed

Utah State University extension provides guidance on how recently issued USDA discrimination payments are taxed.

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USDA sent out about $2.2 billion of payments to 43,000 recipients that were affected by some type of discrimination by USDA. These payments were funded the Inflation Reduction Act and were a replacement of a previous program that was ruled unconstitutional by the federal court.

Many farmers who receive these payments might assume that they are non-taxable since it is a payment related to discrimination. However, these payments are taxable and also subject to SE taxation in most situations.

Instead of going into all of the details, we are providing a link to an Utah State University extension article on this subject that provides a great amount of detail and should answer any questions you might have.