Et cetera : New Adjusted Gross Income (AGI) Policy Enacted

John R. Whitaker, State Executive Director for the Iowa Farm Service Agency announced 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.

“Program participants who were eligible in the past, may not be eligible for the 2012 crop year, due to this new policy” said Whitaker. “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 individuals or legal entities IRS reported adjusted gross income. A three year average is used to determine whether an individual or legal entity qualified to receive benefits.

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 www.fsa.usda.gov.