Farmers whose operations are classified as LLCs, S Corps, or a similar business have until Sept. 15 to make changes to existing operations to ensure they can benefit from new farm program payment rules for qualified pass-through entities (QPTs).

Republicans’ July 2025 tax and spending bill made covered QPTs eligible for multiple payment limitations for commodity support programs such as Agricultural Risk Coverage and Price Loss Coverage, beginning with program year 2026.

The law also raised the payment limit to $155,000 for those programs, from $125,000, beginning with crop year 2025. Payment limits also will be adjusted annually for inflation.

This means if a farm operation is a pass-through LLC with two owners, each owner would be eligible for a maximum payment of $155,000, for a total disbursement of $310,000. Previously, LLCs and other QPTs were only eligible for a single payment split between each owner (i.e. each owner would receive a maximum of $77,500 under the new payment limit, instead of $155,000).

The change is designed to subject qualified pass-through entities to the same payment rules as general partnerships and joint ventures.

Like with general partnerships and joint ventures, parties comprising ownership in a QPT must be actively engaged in farming to qualify for payments.

Reporting Deadline Information

In future years, FSA will continue to use June 1 — not Sept. 15 — as the deadline for changes to farm operations and to determine ownership interest in an entity.

Farmers should contact their local FSA county office to update their farm operating plan whenever changes are made, including changes to members and owned or operated land. 

All members of the QPT must sign the operating plan, even if a single member has signature authority for the entity. Once the plan is on file, any members with recognized signature authority can sign documents on behalf of the QPT.

Adjusted Gross Income Requirement Changes

The July 2025 law also provided covered farmers with exemptions from AGI limits. If a farmer’s average AGI exceeds $900,000, they generally remain ineligible from payments under conservation and disaster programs such as the Noninsurable Crop Disaster Assistance Program (NAP), unless they derive at least 75% of their AGI from farming, ranching or silviculture.

“Farming” also includes agritourism and direct-to-consumer marketing.

Additionally, AGI limit compliance will now be certified at the member level instead of the entity level for QPTs, in another attempt to align their treatment with joint operations’ treatment. For example, if each owner of the aforementioned pass-through LLC has less than $900,000 in AGI, the LLC may retain payment eligibility, even if the entity has more than $900,000.

Sources and More Information: USDA Issues New Payment Limitation and Eligibility Rules | Center for Agricultural Law and Taxation

USDA Expands Payment Limitation and Payment Eligibility Provisions for Farmers | Farm Service Agency