Farm Payments Subject to Adjusted Gross Income Limit

Farm Payments Subject to Adjusted Gross Income Limit

If you sign up for 2012 USDA farm program, be aware of the new policy on payment limits. Visit your local FSA office if you have questions.

New for 2012 is an additional average Adjusted Gross Income (AGI) limitation of $1 million that is applicable to all recipients of 2012 direct payments. All 2012 direct payments are subject to this average AGI limitation in addition to the $500,000 average nonfarm AGI and the $750,000 average farm AGI limitations.

FAQ: USDA has enacted a new policy regarding payment limitations based on adjusted gross income (AGI) for the 2012 farm program. What are the new limits? Who is eligible to participate in farm programs and who isn't?

Answer: John Whitaker, state executive director for USDA's Farm Service Agency in Iowa says, yes, that there is a new Adjusted Gross Income (AGI) policy for 2012. In addition to the current regulations, this new policy reviews the combination of both farm and non-farm limitations and if these together exceed $1 million, program participants are ineligible for direct payments under the DCP and/or ACRE programs. 

"USDA farm program participants who were eligible in the past, may not be eligible for the 2012 crop year, due to this new policy" he says. "Program participants need to be aware of policy changes before they arrive in our county offices to sign up." 

All persons and legal entities requesting certain program payments, either directly or indirectly, are subject to average Adjusted Gross Income (AGI) provisions. AGI is the individual's or legal entity's IRS reported adjusted gross income. A three year average is used to determine whether an individual or legal entity qualified to receive benefits.

There are new AGI limits to determine is you are eligible

Persons or legal entities whose average nonfarm AGI exceeds $500,000 are not eligible for DCP or ACRE payments. Also, persons or legal entities whose average farm AGI exceeds $750,000 are not eligible for direct payments under the DCP and the ACRE programs.  In addition, individual's or entities whose total nonfarm and farm AGI is $1 million or more, are ineligible for direct payments under the DCP and ACRE programs. 

Compliance or verification will be conducted through a data-sharing process between the Farm Service Agency (FSA) and IRS.  IRS will report the results of this process to FSA on a regular basis.  Noncompliance with AGI by exceeding the applicable limitations or by not submitting the required documents, will result in the determination of ineligibility of program benefits. 

Additional information on AGI requirements or other programs administered by FSA is available at your local FSA county office or online at

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