On June 3, 2026, the USDA’s Farm Service Agency (FSA) officially changed the game. And if you farm through a corporate or LLC structure, you have a narrow window to capture the full benefit before the 2026 program year closes.
Under previous FSA rules, general partnerships and joint ventures could qualify for multiple payment limitations, depending on the number of actively engaged family members involved in farming.
But if you were set up as an LLC or S-Corp (which can be better structures for liability protection and estate planning), the FSA treated the entire entity as a single unit with just one payment limit. Unfortunately, the structure recommended to protect your family’s future was also the one that limited your access to government support.
What Changed Under the Working Families Tax Cuts Act?
The Working Families Tax Cuts Act directed the FSA to close this structural gap, and on June 3, 2026, they followed through. Beginning with the 2026 crop year, qualified LLCs, S-Corps, partnerships, joint ventures, and similar entities are now treated as pass-through entities.
This change means payment eligibility is now determined at the individual member level rather than at the entity level. Each qualified member of an LLC or S-Corp who meets the “actively engaged in farming” standard can now be counted toward expanded payment eligibility.
What Does “Actively Engaged in Farming” Mean Under the New Rules?
Under the new standard, members across all entity types can qualify by contributing labor or management to the farming operation. Management contributions must be:
- Significant: Not nominal involvement
- At-risk: The member must have financial exposure in the operation
- Active: Ongoing participation, not passive investment
If you have family members who are genuinely working in the operation but whose contributions haven’t been formally documented, now is the time to get that right.
This is where working with an advisor who understands both FSA compliance and tax strategy is especially important.
What Else Could My Farm Qualify For? (ARC, PLC, and AGI Changes)
The structural change is important, but the numbers make it even more compelling.
ARC and PLC Payment Limits
The Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) payment cap is increasing from $125,000 to $155,000 per person. This increase applies retroactively to the 2025 crop year. If your operation qualifies, you may have money sitting on the table from the prior year that you can still capture.
Going forward, the cap will adjust annually for inflation.
The Modernized AGI Definition
The $900,000 Adjusted Gross Income cap for conservation and disaster programs has also been meaningfully updated. The existing 75% farming income exemption now counts a broader set of revenue streams as “farming income,” including:
- Agri-tourism income (farm stays, u-pick operations, farm events)
- Direct-to-consumer sales (farmers markets, farm stands)
- Certain equipment sales
For diversified operations that have built revenue streams beyond commodity production, this change could be the difference between qualifying for conservation cost-share or disaster assistance or not.
Entity-Level Relief
The most practical administrative change is that qualified pass-through entities are no longer required to certify AGI compliance at the entity level. Compliance is now handled at the individual member level. Simplifying the paperwork and removing the compliance friction point that affected multi-member operations in the past.
Can I Restructure My Farm Operation Right Now to Take Advantage of This?
The September 15, 2026, deadline to file updated farm operating plans with your local FSA office is firm. But restructuring your entity in a hurry, without coordinating across your insurance and tax strategy, carries serious risks.
Crop insurance policies are tied to your current entity structure. An abrupt change could disrupt active coverage or create gaps in your Noninsured Crop Disaster Assistance Program (NAP) eligibility in the middle of a growing season.
Here’s what you should do:
- Meet with your CPA to model what expanded payment eligibility actually means for your operation’s bottom line and tax strategy
- Call your crop insurance agent to map out any coverage implications before any structural changes are made
- File updated farm operating plans with FSA no later than September 15, 2026
What Should I Do Before the September 15 Deadline?
The USDA has given family farm operations one of the most significant policy gifts in recent memory, but the benefit only reaches those who take deliberate action before the deadline.
Between now and September 15, operations should:
- Review their current entity structure with the MBE CPAs Agribusiness team, who understands both FSA payment rules and farm tax strategy.
- Document the active contributions of every qualifying family member with specificity and accuracy.
- Coordinate with crop insurance before making any structural adjustments.
- File updated farm operating plans that accurately reflect the new pass-through entity framework
Do you have the right plan in place to capture this change?
If you’d like to review your entity structure, document your members’ active engagement, and align your FSA filing with your broader tax strategy, let’s talk before the window closes.